Module: | MODULE A: INTERNATIONAL BANKING
Q36: Consider the following statements concerning the remittance of assets by persons emigrating from India:
Statement 1: A resident individual who officially emigrates from India is allowed to remit their entire global wealth abroad instantly, completely bypassing the 250,000 US Dollars limit.
Statement 2: Emigrants can draw foreign exchange up to 250,000 US Dollars or an amount prescribed by the country of emigration, whichever is higher, strictly to meet their initial migration and settlement expenses.
Statement 3: Once an individual attains the status of a non-resident post-emigration, they can no longer use the Liberalised Remittance Scheme, but must rely on a separate one million US Dollar scheme for remitting assets from their Indian accounts.
Which of the statements given above are incorrect?
Statement 2: Emigrants can draw foreign exchange up to 250,000 US Dollars or an amount prescribed by the country of emigration, whichever is higher, strictly to meet their initial migration and settlement expenses.
Statement 3: Once an individual attains the status of a non-resident post-emigration, they can no longer use the Liberalised Remittance Scheme, but must rely on a separate one million US Dollar scheme for remitting assets from their Indian accounts.
Which of the statements given above are incorrect?
✅ Correct Answer: A
The correct answer is A. Statement 1 is incorrect.
The transition from resident to non-resident status involves specific capital controls.
Structurally, when a resident emigrates, they cannot instantly transfer unlimited wealth abroad.
The central bank strictly limits the remittance of capital assets outside India to prevent sudden macroeconomic shocks.
Statement 1 is entirely false.
Statement 2 is correct.
The central bank recognizes that emigration involves significant upfront costs.
Therefore, under the current account transaction rules, an emigrant can draw up to the standard 250,000 US Dollars.
If the destination country mandates a higher deposit for granting the visa, the Authorised Dealer bank can legally release the higher amount based on official documentation.
Statement 3 is also correct.
The moment an individual physically leaves India for long-term employment or settlement, they lose their resident status under the foreign exchange laws.
Consequently, they exit the purview of the resident remittance scheme and must utilize the separate one million US Dollar per financial year limit applicable to non-residents for repatriating their domestic Indian assets.
The transition from resident to non-resident status involves specific capital controls.
Structurally, when a resident emigrates, they cannot instantly transfer unlimited wealth abroad.
The central bank strictly limits the remittance of capital assets outside India to prevent sudden macroeconomic shocks.
Statement 1 is entirely false.
Statement 2 is correct.
The central bank recognizes that emigration involves significant upfront costs.
Therefore, under the current account transaction rules, an emigrant can draw up to the standard 250,000 US Dollars.
If the destination country mandates a higher deposit for granting the visa, the Authorised Dealer bank can legally release the higher amount based on official documentation.
Statement 3 is also correct.
The moment an individual physically leaves India for long-term employment or settlement, they lose their resident status under the foreign exchange laws.
Consequently, they exit the purview of the resident remittance scheme and must utilize the separate one million US Dollar per financial year limit applicable to non-residents for repatriating their domestic Indian assets.