Module: | MODULE A: INTERNATIONAL BANKING
Q27: Consider the following statements regarding non-permissible or prohibited remittances under the foreign exchange framework:
Statement 1: Remittances out of lottery winnings, income from racing, or for the purchase of sweepstakes are strictly prohibited under the current account transaction rules.
Statement 2: Resident individuals are permitted to remit funds for margin trading on overseas exchanges, provided the total amount does not exceed the 250,000 US Dollars annual limit.
Statement 3: Remittance facilities are not available for capital account transfers to countries identified by the Financial Action Task Force as non-cooperative countries and territories.
Which of the statements given above are correct?
Statement 2: Resident individuals are permitted to remit funds for margin trading on overseas exchanges, provided the total amount does not exceed the 250,000 US Dollars annual limit.
Statement 3: Remittance facilities are not available for capital account transfers to countries identified by the Financial Action Task Force as non-cooperative countries and territories.
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 foreign exchange framework categorizes transactions into permissible and prohibited lists.
Structurally, prohibited transactions include any remittance for the purchase of lottery tickets, sweepstakes, banned magazines, and the remittance of racing or lottery winnings, making Statement 1 correct.
Statement 2 is incorrect because the central bank strictly prohibits remittances for margin trading or trading in foreign exchange abroad.
All overseas investments must be delivered and un-leveraged to prevent speculative currency risks.
Historically, to align with global Anti-Money Laundering standards, it is mandated that no capital account remittances can be sent to entities or individuals in jurisdictions classified as non-cooperative by the Financial Action Task Force, validating Statement 3.
The foreign exchange framework categorizes transactions into permissible and prohibited lists.
Structurally, prohibited transactions include any remittance for the purchase of lottery tickets, sweepstakes, banned magazines, and the remittance of racing or lottery winnings, making Statement 1 correct.
Statement 2 is incorrect because the central bank strictly prohibits remittances for margin trading or trading in foreign exchange abroad.
All overseas investments must be delivered and un-leveraged to prevent speculative currency risks.
Historically, to align with global Anti-Money Laundering standards, it is mandated that no capital account remittances can be sent to entities or individuals in jurisdictions classified as non-cooperative by the Financial Action Task Force, validating Statement 3.