Module: | MODULE A: INTERNATIONAL BANKING
Q25: Consider the following statements regarding the eligibility of entities and individuals under the Liberalised Remittance Scheme:
Statement 1: Resident individuals, including minors, are permitted to freely remit up to 250,000 US Dollars per financial year under the scheme, provided the declaration form is countersigned by the minor's natural guardian.
Statement 2: Hindu Undivided Families and partnership firms are allowed to avail the facility up to a sub-limit of 100,000 US Dollars per financial year for permissible current account transactions.
Statement 3: Non-Resident Indians cannot remit funds from India under this specific scheme, but they are permitted to transfer funds from their specific non-resident bank accounts as per separate regulations.
Which of the statements given above are correct?
Statement 2: Hindu Undivided Families and partnership firms are allowed to avail the facility up to a sub-limit of 100,000 US Dollars per financial year for permissible current account transactions.
Statement 3: Non-Resident Indians cannot remit funds from India under this specific scheme, but they are permitted to transfer funds from their specific non-resident bank accounts as per separate regulations.
Which of the statements given above are correct?
✅ Correct Answer: B
The correct answer is B. Statements 1 and 3 are correct, while Statement 2 is incorrect.
The Liberalised Remittance Scheme is a foreign exchange policy initiative introduced by the central bank.
It allows resident individuals to freely remit up to 250,000 US Dollars per financial year for permissible current or capital account transactions.
Structurally, the scheme explicitly includes minors, with the operational caveat that the official declaration form must be countersigned by the natural guardian.
Historically, since its inception in 2004, the scheme has strictly excluded corporate bodies, partnership firms, Hindu Undivided Families, and Trusts.
Statement 2 fails because these entities cannot utilize the scheme for any amount.
Furthermore, the scheme is exclusively for Indian residents.
Non-Resident Indians utilize different remittance mechanisms through their external accounts, making Statement 3 legally accurate.
The Liberalised Remittance Scheme is a foreign exchange policy initiative introduced by the central bank.
It allows resident individuals to freely remit up to 250,000 US Dollars per financial year for permissible current or capital account transactions.
Structurally, the scheme explicitly includes minors, with the operational caveat that the official declaration form must be countersigned by the natural guardian.
Historically, since its inception in 2004, the scheme has strictly excluded corporate bodies, partnership firms, Hindu Undivided Families, and Trusts.
Statement 2 fails because these entities cannot utilize the scheme for any amount.
Furthermore, the scheme is exclusively for Indian residents.
Non-Resident Indians utilize different remittance mechanisms through their external accounts, making Statement 3 legally accurate.