In a move aimed at enhancing financial flexibility within Gujarat International Finance Tec-City, the Reserve Bank of India has broadened the scope of remittances under the Liberalised Remittance Scheme.
This development now permits Indian residents to open foreign currency accounts within GIFT City’s International Financial Services Centres. Remittance in financial terms means sending money to someone in another country in their currency.
Earlier, the remittances were only allowed for the payment of fees for education at foreign universities and investments in IFSCs, the central bank said in a statement on Wednesday.
The decision, announced by the RBI on Wednesday, authorises certain entities to help send money abroad to access financial services or products, in accordance with the IFSC Authority Act, 2019. This measure is expected to streamline international financial transactions for Indians.
The International Financial Services Centre is a specialised area within GIFT City, where international financial transactions are conducted. It serves both Indian residents and foreign entities under a secure regulatory environment.
Additionally, the central bank also permitted all current or capital account transactions, except those in IFSCs, to be conducted through a Foreign Currency Account held in IFSCs.
Indian residents can now open Foreign Currency Accounts within IFSCs, offering greater flexibility in managing foreign currency transactions. Essentially meaning, Indian residents can hold money in foreign currencies like US dollars or euros in accounts called FCAs.
FCAs can be used for these specific purposes by Indian residents:
