What changed
The existing LRS limit of USD 75,000 per financial year has been enhanced to USD 125,000 with immediate effect. This change was announced in the Second Bi-Monthly Monetary Statement for 2014-15. All other terms and conditions of the scheme remain unchanged.
What it means for you
Banks can now allow resident individuals to remit up to USD 125,000 per financial year under LRS for any permitted current or capital account transaction. This gives customers greater flexibility for overseas investments, education, travel, and medical expenses. Banks must ensure remittances are not used for prohibited activities like margin trading or lottery.
What you must do
- Update internal systems and LRS processing limits to reflect the new USD 125,000 per financial year cap.
- Inform all branches and customer-facing staff about the enhanced limit and effective date.
- Communicate the change to customers through notices, website updates, and direct outreach.
- Continue to verify that remittances under LRS comply with all existing terms and conditions.
Who it affects
AD Category-I banks, Resident individual customers using LRS, Bank compliance and operations teams
When does the new LRS limit of USD 125,000 take effect?
The enhanced limit is effective immediately from the date of the circular, June 3, 2014.
Can remittances be made for any purpose under the new limit?
Remittances are allowed for any permitted current or capital account transaction, but not for prohibited activities like margin trading or lottery.
Are there any other changes to the LRS scheme besides the limit?
No, all other terms and conditions of the scheme remain unchanged as per the circular.