The rate of interest and processing fee was nominal and the loan got sanctioned on proper time.
Liberalised Remittance Scheme (LRS)
In terms of the extant Reserve Bank of India (RBI) regulations, under the Liberalised Remittance Scheme (LRS), Authorised Dealers may freely allow remittances by resident individuals up to USD 250,000 per Financial Year (April-March) for any permitted current or capital account transaction or a combination of both.
Few highlighted points are given below
- Under the Liberalised Remittance Scheme, Authorised Dealers may freely allow remittances by resident individuals up to USD 250,000 per Financial Year (April-March) for any permitted current or capital account transaction or a combination of both. The Scheme is not available to corporates, partnership firms, HUF, Trusts, etc.
- Remittances under the Scheme can be consolidated in respect of family members, subject to individual family members complying with its terms and conditions. However, clubbing is not permitted by other family members for capital account transactions such as opening a bank account/ investment/ purchase of property, if they are not the co-owners/ co-partners of the overseas bank account/ investment/ property. Further, a resident cannot gift to another resident, in foreign currency, for the credit of the latter’s foreign currency account held overseas under LRS.
- The limit of USD 250,000 per Financial Year (FY) under the Scheme also includes/ subsumes remittances for Current Account transactions (i.e. private visit; gift/ donation; going overseas on employment; emigration; maintenance of close relatives overseas; business trip; medical treatment overseas; studies overseas) available to resident individuals under Para 1 of Schedule III to Foreign Exchange Management (Current Account Transactions) Amendment Rules, 2015 dated May 26, 2015. Release of foreign exchange exceeding USD 250,000 requires prior permission from the Reserve Bank of India.
The permissible Capital Account transactions by an individual under LRS are:
- Opening of Foreign Currency Account overseas with a bank;
- Purchase of property overseas;
- Making investments overseas - acquisition and holding shares of both listed and unlisted overseas company or debt instruments; acquisition of qualification shares of an overseas company for holding the post of Director; acquisition of shares of a foreign company towards professional services rendered or in lieu of Director’s remuneration; investment in units of Mutual Funds, Venture Capital Funds, unrated debt securities, promissory notes;
- Setting up Wholly Owned Subsidiaries and Joint Ventures (with effect from August 5, 2013) outside India for bonafide business, subject to the terms & conditions stipulated in Notification No. FEMA. 263/ RB-2013 dated March 5, 2013;
- Extending loans including loans in Indian Rupees to Non-resident Indians (NRIs) who are relatives as defined in Companies Act, 2013.
This communication was to keep you updated with RBI policy. To know more, click here.
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