What changed
The per-financial-year remittance limit under the Liberalised Remittance Scheme for resident individuals was doubled from USD 50,000 to USD 100,000. This change was announced in the Annual Policy Statement for 2007-08 and implemented via this circular. A revised Application cum Declaration form reflecting the new limit was also issued.
What it means for you
Banks can now allow resident individuals to remit up to USD 100,000 per year for any permissible current or capital account transaction, or a combination of both. However, banks must not extend any credit facilities to facilitate these remittances, and prohibited transactions (e.g., margin calls to overseas exchanges) remain barred. All other existing conditions from prior circulars stay unchanged.
What you must do
- Update internal systems and forms to reflect the new USD 100,000 limit per financial year.
- Ensure no credit facilities are extended to customers for remittances under the Scheme.
- Verify that remittances are only for permissible current or capital account transactions as per FEMA.
- Communicate the enhanced limit and conditions to all branches and customers.
- Use the revised Application cum Declaration form for all LRS transactions.
Who it affects
AD Category-I banks, Resident individual customers, Compliance and forex departments of banks
What is the new limit under the Liberalised Remittance Scheme?
The limit has been increased from USD 50,000 to USD 100,000 per financial year (April-March) for resident individuals.
Can banks provide loans to customers for making LRS remittances?
No, banks are explicitly prohibited from extending any kind of credit facilities to resident individuals to facilitate remittances under the Scheme.
Are all types of transactions allowed under the enhanced limit?
Only permissible current or capital account transactions are allowed. Prohibited transactions under FEMA, such as remittances for margin calls to overseas exchanges, are not permitted.