Module: | MODULE A: INTERNATIONAL BANKING
Q28: Consider the following statements concerning geographic restrictions and medical exceptions under the Liberalised Remittance Scheme:
Statement 1: The release of foreign exchange under this scheme is completely unrestricted globally, allowing resident individuals to freely remit funds to residents of Nepal and Bhutan in US Dollars.
Statement 2: For medical treatment abroad, an Authorised Dealer may release foreign exchange exceeding the 250,000 US Dollars limit without seeking prior regulatory approval, provided the request is backed by an estimate from a hospital abroad.
Statement 3: A person who falls sick after travelling overseas can be released additional foreign exchange for medical treatment by an Authorised Dealer without prior central bank approval.
Which of the statements given above are incorrect?
Statement 2: For medical treatment abroad, an Authorised Dealer may release foreign exchange exceeding the 250,000 US Dollars limit without seeking prior regulatory approval, provided the request is backed by an estimate from a hospital abroad.
Statement 3: A person who falls sick after travelling overseas can be released additional foreign exchange for medical treatment by an Authorised Dealer without prior central bank approval.
Which of the statements given above are incorrect?
✅ Correct Answer: A
The correct answer is A. Statement 1 is incorrect.
The framework governing miscellaneous remittance facilities establishes specific geographic and procedural boundaries.
Structurally, the release of foreign exchange under this scheme is not admissible for travel to, or transactions with, residents of Nepal and Bhutan.
Transactions with these neighboring nations are managed through separate bilateral Rupee arrangements, rendering Statement 1 false.
Conversely, Statements 2 and 3 are correct.
Historically, current account limits were rigid, but to ensure humanitarian flexibility, the central bank delegated powers to Authorised Dealers.
These banks can legally breach the 250,000 US Dollars ceiling for medical treatments or overseas education if the resident provides a certified estimate from the overseas medical institution, ensuring legitimate life-saving needs are not hindered by bureaucratic delays.
The framework governing miscellaneous remittance facilities establishes specific geographic and procedural boundaries.
Structurally, the release of foreign exchange under this scheme is not admissible for travel to, or transactions with, residents of Nepal and Bhutan.
Transactions with these neighboring nations are managed through separate bilateral Rupee arrangements, rendering Statement 1 false.
Conversely, Statements 2 and 3 are correct.
Historically, current account limits were rigid, but to ensure humanitarian flexibility, the central bank delegated powers to Authorised Dealers.
These banks can legally breach the 250,000 US Dollars ceiling for medical treatments or overseas education if the resident provides a certified estimate from the overseas medical institution, ensuring legitimate life-saving needs are not hindered by bureaucratic delays.