Q. Consider the following statements:
1.Liberalised Remittance Scheme (LRS) aims to promote exports from India.
2.Under the Liberalised Remittance Scheme (LRS), residents in India can open Foreign Currency Accounts (FCAs) in the International Financial Services Centre (IFSC) at GIFT City.
Which of the statement(s) given above is/are correct?
Explanation –
Statement 1 is incorrect. The Liberalised Remittance Scheme (LRS) allows resident individuals to remit up to USD 250,000 per financial year for any permitted current or capital account transactions, such as expenses for education, travel, medical treatment, and maintenance of relatives abroad. It’s primarily a scheme to allow individuals to send money abroad for various purposes.
Statement 2 is correct. The RBI has recently allowed resident individuals to open Foreign Currency Accounts (FCAs) in the International Financial Services Centre (IFSC) at GIFT City under the Liberalised Remittance Scheme (LRS). This new provision expands the scope of LRS and allows residents to use these accounts for various permissible transactions.
Source: The Hindu
