The Reserve Bank of India issued a notification, widening the scope of remittances to International Financial Services Centres (IFSCs) under the Liberalised Remittance Scheme (LRS). At present, remittances under LRS to IFSCs can be made only for making investments in IFSCs in securities except those issued by entities/ companies resident in India (outside IFSC); and payment of fees for education to foreign universities or foreign institutions in IFSCs for pursuing specific courses. However, on a review, RBI has decided that Authorised Persons may facilitate remittances for all permissible purposes under LRS to IFSCs for availing financial services or financial products as per the International Financial Services Centres Authority Act, 2019 within IFSCs; and all current or capital account transactions, in any other foreign jurisdiction (other than IFSCs) through an FCA held in IFSCs. For these permissible purposes, resident individuals can open Foreign Currency Account (FCA) in IFSCs, RBI stated. Residents will now have the opportunity to open a fixed deposit in US dollars at a bank located in GIFT IFSC. Additionally, it will contribute to the development of a robust banking environment at GIFT IFSC. Furthermore, residents will now be able to invest overseas through an FCA account, as long as it does not exceed the LRS limit of $250,000 per year.

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