Module: | MODULE A: INTERNATIONAL BANKING
Q64: Consider the following statements regarding Employee Stock Option Plans (ESOPs):
1. A resident employee can remit funds to purchase shares of their foreign holding company under a General Permission route.
2. Remittances made under the General Permission route for ESOPs are counted towards the employee's LRS limit.
3. If an ESOP scheme does not qualify for General Permission, the employee can use their LRS limit to purchase the shares.
Which of the statements given above is or are correct?
2. Remittances made under the General Permission route for ESOPs are counted towards the employee's LRS limit.
3. If an ESOP scheme does not qualify for General Permission, the employee can use their LRS limit to purchase the shares.
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.Structural Breakdown: General Permission: If an Indian branch or subsidiary employee buys shares of the foreign parent company under a standard ESOP scheme, this is allowed under General Permission.
Crucially, this is not counted towards the LRS limit.
It is an independent allowance.
LRS Route: If the employee wants to buy shares that don't fit the General Permission criteria (or if they want to buy more than what the scheme offers), they can use their LRS limit (USD 250,000) to fund the purchase.