RBI Expands Liberalised Remittance Scheme to Enhance Financial Flexibility

In a strategic move to increase financial flexibility within Gujarat International Finance Tec-City (GIFT City), the Reserve Bank of India (RBI) has widened the scope of remittances under the Liberalised Remittance Scheme (LRS). This significant development now allows Indian residents to open foreign currency accounts (FCAs) within GIFT City’s International Financial Services Centres (IFSCs). This initiative, announced by the RBI on Wednesday, is set to streamline international financial transactions for Indian residents, offering them new avenues for managing their foreign currency holdings and investments. Previously, remittances under the LRS were restricted primarily to paying educational fees at foreign universities and investments in IFSCs. The recent decision by the RBI broadens this scope significantly, enabling Indian residents to remit funds for a wider range of purposes. This includes accessing financial services or products internationally, in accordance with the IFSC Authority Act, 2019. The IFSC within GIFT City is a specialised zone where international financial transactions are conducted, serving both Indian and foreign entities under a robust regulatory framework.