Module: | MODULE A: INTERNATIONAL BANKING
Q43: Consider the following statements regarding the opening of overseas joint bank accounts under the Liberalised Remittance Scheme:
Statement 1: A resident individual can open and maintain a foreign currency bank account overseas jointly with a non-resident relative.
Statement 2: When a joint account is established overseas with a non-resident relative, the operational mandate must be strictly restricted to a former or survivor basis.
Statement 3: The resident individual is permitted to use this overseas joint account to receive commercial trade payments from foreign corporate buyers to save on currency conversion fees.
Which of the statements given above are correct?
Statement 2: When a joint account is established overseas with a non-resident relative, the operational mandate must be strictly restricted to a former or survivor basis.
Statement 3: The resident individual is permitted to use this overseas joint account to receive commercial trade payments from foreign corporate buyers to save on currency conversion fees.
Which of the statements given above are correct?
✅ Correct Answer: A
The correct answer is A. Statements 1 and 2 are correct, while Statement 3 is incorrect.
The remittance framework facilitates family financial planning while maintaining strict boundaries against trade circumvention.
Structurally, resident individuals are allowed to open, maintain, and hold foreign currency bank accounts outside India.
The central bank permits these accounts to be held jointly with a non-resident who is a close relative, validating Statement 1. However, to ensure the resident Indian remains the primary controller of the funds remitted from India, the regulatory mandate dictates that such joint accounts must operate strictly on a former or survivor basis.
This means the non-resident relative can only take control of the funds after the resident account holder's demise, making Statement 2 legally accurate.
Statement 3 is entirely incorrect.
The remittance scheme is exclusively a personal facility.
The central bank strictly prohibits the use of any personal foreign currency account opened under this scheme for business, commercial, or trade purposes.
All export receipts or commercial trade payments must be routed through official corporate trade channels, not personal joint accounts.
The remittance framework facilitates family financial planning while maintaining strict boundaries against trade circumvention.
Structurally, resident individuals are allowed to open, maintain, and hold foreign currency bank accounts outside India.
The central bank permits these accounts to be held jointly with a non-resident who is a close relative, validating Statement 1. However, to ensure the resident Indian remains the primary controller of the funds remitted from India, the regulatory mandate dictates that such joint accounts must operate strictly on a former or survivor basis.
This means the non-resident relative can only take control of the funds after the resident account holder's demise, making Statement 2 legally accurate.
Statement 3 is entirely incorrect.
The remittance scheme is exclusively a personal facility.
The central bank strictly prohibits the use of any personal foreign currency account opened under this scheme for business, commercial, or trade purposes.
All export receipts or commercial trade payments must be routed through official corporate trade channels, not personal joint accounts.