Resident Indians can now open Foreign Currency Accounts (FCAs) at Gift City under the liberalized remittances scheme (LRS) for a wider range of purposes. This includes sending gifts to friends abroad, buying property overseas, purchasing insurance, making fixed deposits, paying for education loans, and funding international travel. The Reserve Bank of India (RBI) has expanded the LRS rules at International Financial Services Centres (IFSCs) like Gift City, aligning them with global financial centers.
“This decisive move aligns GIFT IFSC with other global financial centers, allowing resident investors to leverage our platform for a wider range of overseas investments and expenditures,” said Tapan Ray, MD and Group CEO of GIFT City. By clarifying the use of LRS for investments and enabling transactions like insurance and education loan payments in foreign currency, the RBI has significantly enhanced the attractiveness and utility of GIFT IFSC.
The RBI’s expansion of the LRS for GIFT City IFSC now allows resident individuals to use funds for broader financial services and products from IFSC. This includes insurance and fixed deposits in foreign currency, benefiting IFSC banks and life insurance companies in GIFT IFSC while providing more international investment opportunities for Indian residents. Jaimin Patel, partner at EY, highlighted the enhanced benefits for Indian investors.
In a notification posted on its website, RBI announced that authorized persons may facilitate remittances for all permissible purposes under LRS to IFSCs for all current or capital account transactions. This applies to any other foreign jurisdiction (other than IFSCs) through an FCA held in IFSCs, availing financial services or products as per the International Financial Services Centres Authority Act, 2019 within IFSCs.
Source: The Economic Times