What changed
RBI issued a clarification on the Liberalised Remittance Scheme (LRS) for resident individuals. It explicitly allows minors to remit, with the declaration form countersigned by a natural guardian. It also permits consolidation of remittances for family members and allows use of funds for purchasing art objects, subject to other applicable laws like the Foreign Trade Policy.
What it means for you
Banks must update their LRS application forms to include a field for guardian countersignature for minor applicants. They need to ensure that consolidated family remittances are tracked per individual within the USD 200,000 limit. Additionally, banks should verify that art purchases comply with the Foreign Trade Policy and other relevant regulations before processing.
What you must do
- Update LRS application cum declaration forms to include guardian countersignature for minor remitters.
- Ensure consolidated family remittances are tracked per individual within the USD 200,000 annual limit.
- Verify that remittances for art purchases comply with the Foreign Trade Policy and other applicable laws.
- Train staff on the revised LRS procedures and communicate changes to customers.
Who it affects
AD Category-I banks, Resident individuals using LRS, Minors and their guardians, Customers purchasing art objects abroad
Can a minor remit funds under LRS?
Yes, a minor can remit under LRS, but the LRS declaration form must be countersigned by the minor's natural guardian.
Can family members consolidate their LRS remittances?
Yes, remittances can be consolidated for family members, provided each individual complies with the scheme's terms and conditions, including the USD 200,000 annual limit per person.
Can LRS funds be used to buy art?
Yes, but only if the purchase complies with other applicable laws, such as the Foreign Trade Policy of the Government of India.