RBI Allows Indians To Open Foreign Currency Accounts In Gujarat's GIFT City

In a new development,country's central bank, the Reserve Bank of India has extended its purview of remittances to the International Financial Services Centres or IFSC. This will be under the Liberalised Remittance Scheme or LRS. This change will allow Indians who reside in the country to open foreign currency accounts in Gujarat's GIFT City.

In addition, the government's banker has also allowed all current or capital account transactions in any of the other foreign jurisdictions.

This system provides additional cover for currency deviation and makes it easier to access the world's reserve currency, the US Dollar.

In a statement issued Tapan Ray, MD and Group CEO, GIFT City welcomed the decision and said, “We at GIFT IFSC welcome the Reserve Bank of India's recent circular expanding the scope of the Liberalised Remittance Scheme (LRS). This decisive move aligns GIFT IFSC with other global financial centers, allowing resident investors to leverage our platform for a wider range of overseas investments and expenditures. By clarifying the use of LRS for investments and enabling transactions like insurance and education loan payments in foreign currency, the RBI has significantly enhanced the attractiveness and utility of GIFT IFSC. We thank the RBI for this progressive step, which will bolster GIFT IFSC’s role as a leading international financial services hub."

This system provides potential users with the provision of sending an amount of up to USD 2,50,000 in a 12-month cycle.

This comes as a major relief for many, as previously the LRS were proscribed from investing in the the International Financial Services Centres.

This will allow resident Indians to open a fixed deposit or FD, an important fiscal tool in the financial paradigm in foreign currency like the US dollar or the British Pound in a bank account in GIFT City.