Module: | MODULE A: INTERNATIONAL BANKING
Q50: Consider the following statements regarding the eligibility of different entities to use the remittance facility:
1. The facility is available to all resident individuals, including minors.
2. Hindu Undivided Families (HUFs) are permitted to remit funds under this scheme for the purpose of family inheritance management.
3. Partnership firms and Trusts are prohibited from using this specific remittance scheme.
Which of the statements given above is or are correct?
2. Hindu Undivided Families (HUFs) are permitted to remit funds under this scheme for the purpose of family inheritance management.
3. Partnership firms and Trusts are prohibited from using this specific remittance scheme.
Which of the statements given above is or are correct?
✅ Correct Answer: B
🎯 Quick Answer:
Statements 1 and 3 are correct. Statement 2 is incorrect because HUFs are explicitly prohibited.
Concept Definition: Eligible Entities for the Liberalised Remittance Scheme are strictly defined as Resident Individuals only.Structural Breakdown: Ineligible Entities: Corporates, Partnership Firms, Hindu Undivided Families (HUF), and Trusts are not eligible.They have other specific routes for overseas investment (like the Overseas Direct Investment or ODI route), which have different compliance requirements.Minors: A minor is eligible to remit funds.The compliance requirement is that the Form A2 (declaration form) must be countersigned by the minor's natural guardian.Rationale: The scheme is intended for personal use and individual asset diversification, not for corporate structuring or complex family trust arrangements which could bypass other regulations. Statements 1 and 3 are correct. Statement 2 is incorrect because HUFs are explicitly prohibited.