**Summary:**
This circular, A.P. DIR Series Circular No. 03, issued by the Reserve Bank of India (RBI) on April 26, 2023, addresses remittances to International Financial Services Centres (IFSCs) under the Liberalised Remittance Scheme (LRS). It amends A.P. DIR Series Circular No. 11 dated February 16, 2021, and Master Direction No. 7/2015-16 on LRS.
The key change is the removal of the condition requiring resident individuals to repatriate funds lying idle in Foreign Currency Accounts (FCAs) in IFSCs within 15 days of receipt, for permissible investments under LRS. Resident Individuals may now open FCAs in IFSCs for making permissible investments under LRS. The holding of funds in these accounts will now be governed by the general provisions of the LRS Master Direction.
The circular directs all Category-I Authorised Dealer (AD Category-I) banks to inform their constituents and customers of these changes. The directions are issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999, and are without prejudice to other applicable laws or required approvals.
Further information can be obtained from Ajay Kumar Misra, Chief General Manager-in-Charge, RBI.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for monetary policy and regulation of the banking system.
Liberalised Remittance Scheme: A scheme that allows resident individuals to remit a certain amount of money abroad during a financial year.
International Financial Services Centres: Special economic zones in India that aim to provide financial services to non-residents and residents, in foreign currencies.
A.P. DIR Series Circular No. 11: A circular issued by the Reserve Bank of India regarding remittances to International Financial Services Centres.
Master Direction No. 7/2015-16: A master direction issued by the Reserve Bank of India on the Liberalised Remittance Scheme.
International Financial Services Centres Authority Act, 2019: An act of the Indian Parliament that established the International Financial Services Centres Authority to regulate financial services in IFSCs.
Foreign Currency Account: A bank account that holds funds in a currency other than the account holder's country's currency.
Foreign Exchange Management Act, 1999: An act of the Indian Parliament that provides a legal framework for the regulation of foreign exchange transactions.
भारतीय �रज़व र् बक�
RESERVE BANK OF INDIA
www.rbi.org.in
RBI/2023-24/21
A.P. (DIR Series) Circular No.03 April 26, 2023
To
All Category-I Authorised Dealer Banks
Madam / Sir
Remittances to International Financial Services Centres (IFSCs)
under the Liberalised Remittance Scheme (LRS)
Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to A.P. (DIR Series)
Circular No. 11 dated February 16, 2021, on “Remittances to International Financial Services
Centres (IFSCs) in India under the Liberalised Remittance Scheme (LRS)” and Master Direction
No. 7/2015-16 on Liberalised Remittance Scheme (LRS) as amended from time to time.
2. On a review and with an objective to align the LRS for IFSCs set up under the International
Financial Services Centres Authority Act, 2019 vis-à-vis other foreign jurisdictions, it has been
decided to amend the directions under para 2 (ii) of the aforementioned A.P. (DIR Series) Circular
dated February 16, 2021, as – “Resident Individuals may also open a Foreign Currency Account
(FCA) in IFSCs, for making the above permissible investments under LRS.” Thus, the condition
of repatriating any funds lying idle in the account for a period up to 15 days from the date of its
receipt is withdrawn with immediate effect, which shall now be governed by the provisions of the
scheme as contained in the aforesaid Master Direction on LRS.
3. The Master Direction No. 7 is being updated to reflect these changes.
4. AD Category - I banks should bring the contents of this circular to the notice of their constituents
and customers.
5. The directions contained in this circular have been issued under sections 10(4) and 11(1) of
the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to
permissions/approvals, if any, required under any other law.
Yours faithfully,
(Ajay Kumar Misra)
Chief General Manager-in-Charge