The International Financial Services Centres Authority (IFSCA) on October10, 2024, issued directions to IBUs for operations of the Foreign Currency Accounts (FCA) of Indian resident individuals opened under the Liberalised Remittance Scheme (LRS).
This Circular is applicable to IBUs opening Foreign Currency Accounts (FCA) of resident individuals (‘RI’) as permitted vide A.P. (DIR Series) Circular No.15 pertaining to ‘Remittances to International Financial Services Centres (IFSCs) under the Liberalised Remittance Scheme (LRS)’ dated July 10, 2024, issued by the Reserve Bank of India (RBI). For the purpose of this Circular, FCA shall mean ‘FCAs of RIs with IBUs opened under the LRS’.
The General directions are as stated:
IBUs shall:
• Permit RIs to open FCA for:
o receiving remittances under LRS from onshore India
o receiving remittances from locations other than onshore India
• ensure that all the remittances into the FCA from onshore India under LRS are routed through an Authorised Person (‘AP’);
• obtain a copy of the return submitted by RI to AP (as prescribed by the Reserve Bank of India) before opening of the FCA and at the time of any inward remittance to the FCA from onshore India thereafter;
• ensure that the deployment of funds from the FCA are for the purpose/s declared in the return collected in (iii);
• obtain a declaration from the RI, with respect to remittances into the FCA from locations other than onshore India, that such remittance represents funds duly remitted earlier under LRS or income earned on the investments made from funds duly remitted earlier under LRS;
• ensure that received/realised/unspent/unused foreign exchange from onshore India or from locations other than onshore India in FCA, unless reinvested within a period of 180 days from the date of such receipt/ realisation/ purchase/ acquisition or date of return to India is repatriated through an AP to the account of the RI in designated AD Bank;
• obtain a declaration from the RI to the effect that, such RI shall not settle any domestic transactions with other RI through the FCA, and;
• ensure compliance with the IFSCA (Anti Money Laundering, Counter-Terrorist Financing and Know Your Customer) Guidelines, 2022, including the Circulars issued thereunder.
[File No. IFSCA-FMPP0BR/1/2021-Banking-Part (1)/2]
