To All,
I have a very simple question on the LRS in the RBI website.
Using LRS we can hold shares, mutual funds, bonds, ETFs etc. in the foreign countries but, at the same time it disallows "Remittance for trading in foreign exchange abroad" . This looks contradicting!!
Please can someone explain the ambiguity? What is the difference between trading VS holding shares, mutual funds, bonds or investment.
Tx
donish
Below is the content from the link
http://www.rbi.org.in/commonman/english/scripts/FAQs.aspx?Id=829
=========================================================
Please illustrate the capital account transactions permitted under the scheme.
Ans. Under the Scheme, resident individuals can acquire and hold shares or debt instruments or any other assets including property outside India, without prior approval of the Reserve Bank. Individuals can also open, maintain and hold foreign currency accounts with banks outside India for carrying out transactions permitted under the Scheme.
Q.3. What are the prohibited items under the Scheme?
Ans. The remittance facility under the Scheme is not available for the following:
i) Remittance for any purpose specifically prohibited under Schedule-I (like purchase of lottery tickets/sweep stakes, proscribed magazines, etc.) or any item restricted under Schedule II of Foreign Exchange Management (Current Account Transactions) Rules, 2000;
ii) Remittance from India for margins or margin calls to overseas exchanges / overseas counterparty;
iii) Remittances for purchase of FCCBs issued by Indian companies in the overseas secondary market;
iv) Remittance for trading in foreign exchange abroad;
v) Remittances directly or indirectly to Bhutan, Nepal, Mauritius and Pakistan;
vi) Remittances directly or indirectly to countries identified by the Financial Action Task Force (FATF) as “non co-operative countries and territories”, from time to time; and
vii) Remittances directly or indirectly to those individuals and entities identified as posing significant risk of committing acts of terrorism as advised separately by the Reserve Bank to the banks.
I have a very simple question on the LRS in the RBI website.
Using LRS we can hold shares, mutual funds, bonds, ETFs etc. in the foreign countries but, at the same time it disallows "Remittance for trading in foreign exchange abroad" . This looks contradicting!!
Please can someone explain the ambiguity? What is the difference between trading VS holding shares, mutual funds, bonds or investment.
Tx
donish
Below is the content from the link
http://www.rbi.org.in/commonman/english/scripts/FAQs.aspx?Id=829
=========================================================
Please illustrate the capital account transactions permitted under the scheme.
Ans. Under the Scheme, resident individuals can acquire and hold shares or debt instruments or any other assets including property outside India, without prior approval of the Reserve Bank. Individuals can also open, maintain and hold foreign currency accounts with banks outside India for carrying out transactions permitted under the Scheme.
Q.3. What are the prohibited items under the Scheme?
Ans. The remittance facility under the Scheme is not available for the following:
i) Remittance for any purpose specifically prohibited under Schedule-I (like purchase of lottery tickets/sweep stakes, proscribed magazines, etc.) or any item restricted under Schedule II of Foreign Exchange Management (Current Account Transactions) Rules, 2000;
ii) Remittance from India for margins or margin calls to overseas exchanges / overseas counterparty;
iii) Remittances for purchase of FCCBs issued by Indian companies in the overseas secondary market;
iv) Remittance for trading in foreign exchange abroad;
v) Remittances directly or indirectly to Bhutan, Nepal, Mauritius and Pakistan;
vi) Remittances directly or indirectly to countries identified by the Financial Action Task Force (FATF) as “non co-operative countries and territories”, from time to time; and
vii) Remittances directly or indirectly to those individuals and entities identified as posing significant risk of committing acts of terrorism as advised separately by the Reserve Bank to the banks.
