Module: | MODULE A: INTERNATIONAL BANKING
Q44: Consider the following statements regarding the repatriation of domestic funds by non-residents under the One Million US Dollar Scheme:
Statement 1: Non-resident individuals and Persons of Indian Origin can freely repatriate up to 1 Million US Dollars per financial year from their domestic ordinary bank accounts without requiring special central bank approval.
Statement 2: The One Million US Dollar repatriation limit is a sub-limit contained within the standard resident Liberalised Remittance Scheme.
Statement 3: Funds remitted under this specific non-resident scheme can legitimately include the sale proceeds of immovable property inherited in India.
Which of the statements given above are incorrect?
Statement 2: The One Million US Dollar repatriation limit is a sub-limit contained within the standard resident Liberalised Remittance Scheme.
Statement 3: Funds remitted under this specific non-resident scheme can legitimately include the sale proceeds of immovable property inherited in India.
Which of the statements given above are incorrect?
✅ Correct Answer: A
The correct answer is A. Statement 2 is incorrect.
The foreign exchange framework maintains a rigid legal firewall between the wealth of resident Indians and the domestic assets of non-residents.
Structurally, the One Million US Dollar Scheme is designed exclusively for Non-Resident Indians and Persons of Indian Origin.
It allows them to repatriate up to 1 Million US Dollars per financial year from their domestic non-resident ordinary bank accounts.
This limit is an entirely separate legal facility and has absolutely no overlap or connection with the 250,000 US Dollars Liberalised Remittance Scheme, which is strictly for resident citizens.
Therefore, Statement 2 is fundamentally false.
Statement 1 is correct, as this facility acts as a general permission, bypassing the need for case-by-case regulatory approvals for amounts under the threshold.
Statement 3 is also correct.
Non-residents frequently use this 1 Million US Dollar limit to repatriate legitimate domestic assets, most commonly the sale proceeds of real estate they have inherited in India, subject to the payment of all applicable domestic taxes.
The foreign exchange framework maintains a rigid legal firewall between the wealth of resident Indians and the domestic assets of non-residents.
Structurally, the One Million US Dollar Scheme is designed exclusively for Non-Resident Indians and Persons of Indian Origin.
It allows them to repatriate up to 1 Million US Dollars per financial year from their domestic non-resident ordinary bank accounts.
This limit is an entirely separate legal facility and has absolutely no overlap or connection with the 250,000 US Dollars Liberalised Remittance Scheme, which is strictly for resident citizens.
Therefore, Statement 2 is fundamentally false.
Statement 1 is correct, as this facility acts as a general permission, bypassing the need for case-by-case regulatory approvals for amounts under the threshold.
Statement 3 is also correct.
Non-residents frequently use this 1 Million US Dollar limit to repatriate legitimate domestic assets, most commonly the sale proceeds of real estate they have inherited in India, subject to the payment of all applicable domestic taxes.