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Some thoughts on transmitting money from India.


We were recently asked to advise the client of a London based Independent Financial Adviser from who we regularly receive referrals.

The client of this referrer lives in the UK but has assets in India.

Whilst this is a somewhat complex and changeable area, one of our brokers came across the below information and thought it concise and pertinent enough to simply re-blog it.

As this is not our own work we happily reference the information source and, whilst we can introduce clients who may have an interest in these activities to the appropriately experienced regulated advisers, we would counsel you to make your own enquiries too.

This information may not be the most up to date information out there. If you have more current advice or guidance for our clients and reader,s hopefully informed by your own experiences, then we invite you to post links or get in touch with us directly that we might update this post.

Here we go:

 

The Reserve Bank of India (RBI) in its monetary policy review enhanced the limit under Liberalized Remittance Scheme (LRS) to $250,000 per person per year from existing limit of 125,000 USD.

RBI had reduced the eligibility limit for foreign exchange remittances under LRS to $75,000 in 2013 as a macro-prudential measure. With stability in the foreign exchange market, this limit was enhanced to $125,000 in June 2014 without end-use restrictions, except for prohibited foreign exchange transactions such as margin trading, lotteries and the like.

It was in 2004 that the Reserve Bank of India (RBI) announced the Liberalized Remittance Scheme to facilitate the Indian Residents to transfer funds abroad without its prior permission.

Under this scheme, all resident individuals, including minors, are allowed to freely remit up to USD 250,000 (or its equivalent freely convertible foreign currency) per financial year (April – March).

This scheme is applicable to people like you and me; not for NRIs. If you wish to send money abroad for the following purposes, you can do so without the prior approval of RBI

Purpose of remittance:

  • For travel, studies, medical treatment etc.

  • To acquire shares or debt instruments in listed or unlisted companies or any other assets including acquisition of immovable property directly or indirectly outside India

  • To invest in Mutual funds, Venture funds, unrated debt securities, promissory notes, etc

  • To gift or to give donations

  • To acquire ESOPs in overseas companies (in addition to acquisition of ESOPs linked to ADR/GDR)

  • Repayment of loan taken while an individual was a Non Resident Indian

  • To open, maintain and hold foreign currency accounts with banks outside India for carrying out any permitted transactions

Prohibited transactions: Some of them are –

  • Purchase of lottery tickets/sweep stakes!

  • To use as margin money for trading in overseas stock exchanges

  • To use for trading in overseas stock exchanges

  • To purchase Foreign Currency Convertible Bonds (FCCB) issued by Indian Companies abroad

  • For setting up a company abroad ( however, with effect from August, 2013, to set up a Joint Venture or a Wholly Owned Subsidiary outside India is permitted)

  • Remittance directly or indirectly to Bhutan, Nepal, Mauritius and Pakistan

 

As mentioned, the above is not the work of Prime Cap, but rather comment from a site called: http://www.simplifiedlaws.com/liberalised-remittance-money-transfer-out-of-india/

We tend to advise all clients to speak with the appropriately experienced professionals, however, we can confirm that if a client is able to send USD from India then we are in a position to receive these funds and trade them as we would any other exchange.

Equally, although it is difficult to accurately forecast when money might arrive with an Indian beneficiary, we can exchange currencies in to INR if you are making payments there.


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Prime Cap Payments Limited (T/A Prime Cap | Prime Cap Payments | Prime Cap Global Payments) is registered in England and Wales No: 10755730. Registered address: 27 Old Gloucester Street, London, WC1N 3AX. For clients based in the United Kingdom and rest of the world, payment services for Prime Cap are provided by The Currency Cloud Limited. Registered in England and Wales No. 06323311. Registered Office: Stewardship Building 1st Floor, 12 Steward Street London E1 6FQ. The Currency Cloud Limited is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 for the issuing of electronic money (FRN: 900199).  For clients based in the European Economic Area, payment services for Prime Cap are provided by CurrencyCloud B.V.. Registered in the Netherlands No. 72186178. Registered Office: Nieuwezijds Voorburgwal 296 - 298, Mindspace Nieuwezijds Office 001 Amsterdam. CurrencyCloud B.V. is authorised by the DNB under the Wet op het financieel toezicht to carry out the business of an electronic-money institution (Relation Number: R142701). For clients based in the United States, payment services for Prime Cap are provided by The Currency Cloud Inc. which operates in partnership with Community Federal Savings Bank (CFSB) to facilitate payments in all 50 states in the US. CFSB is registered with the Federal Deposit Insurance Corporation (FDIC Certificate# 57129). The Currency Cloud Inc is registered with FinCEN and authorised in 39 states to transmit money (MSB Registration Number: 31000206794359). Registered Office: 104 5th Avenue, 20th Floor, New York , NY 10011. 
 

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