What changed
The Application cum Declaration form for LRS was revised to capture rupee gifts or loans credited to NRO accounts of non-resident close relatives. These transactions now count toward the USD 200,000 per financial year limit under LRS.
What it means for you
Banks must ensure customers declare all rupee gifts/loans to NRI/PIO close relatives as part of their LRS usage. The revised form helps track total outflows, preventing inadvertent breaches of the annual cap. This aligns LRS reporting with recent policy changes allowing such rupee transfers.
What you must do
- Replace old LRS forms with the revised version annexed to this circular immediately.
- Train staff to verify that rupee gifts/loans to NRI/PIO close relatives are included in the LRS limit declaration.
- Update internal systems to capture and monitor these rupee transactions against the USD 200,000 annual cap.
- Advise customers about the revised form and the inclusion of rupee transfers in LRS limits.
Who it affects
AD Category I banks, Resident individuals using LRS, NRI/PIO close relatives receiving rupee gifts/loans
Does the revised form change the LRS limit of USD 200,000?
No, the limit remains USD 200,000 per financial year. The revision only adds a declaration for rupee gifts/loans to NRI/PIO close relatives, which must be within this overall cap.
What if a customer has already used the old form after the circular date?
Banks should ensure all new LRS applications use the revised form. For any applications processed with the old form, advise customers to submit a supplementary declaration to include rupee transfers.