Note4Students
From UPSC perspective, the following things are important :
Prelims level: Liberalised Remittance Scheme (LRS)
Mains level: Not Much
Central idea: The Reserve Bank of India (RBI) is being asked to monitor card spend under the Liberalised Remittance Scheme (LRS).
Liberalised Remittance Scheme (LRS)
- LRS is a facility provided by the Reserve Bank of India (RBI) to resident individuals to remit funds abroad for permitted current or capital account transactions or a combination of both.
- The scheme was introduced in 2004 and has been periodically reviewed and revised by the RBI.
- Under the scheme, resident individuals can remit up to a certain amount in a financial year for permissible transactions including education, travel, medical treatment, gifts, and investments in equity and debt securities, among others.
- The limit for LRS is currently set at USD 250,000 per financial year.
Eligibility for LRS
- LRS is open to everyone including non-residents, NRIs, persons of Indian origin (PIOs), foreign citizens with PIO status and foreign nationals of Indian origin.
- The Scheme is NOT available to corporations, partnership firms, Hindu Undivided Family (HUF), Trusts etc.
Benefits provided by LRS
- LRS is an easy process that anyone can use to transfer money between two countries.
- It’s especially useful for businesses because they can use it to transfer funds to India, and investors can receive their investments back home.
- LRS also has some added benefits, like fast transfer timing and no issues with exchange rates.
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