BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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to permit citizens of India to transfer funds abroad for permitted current or capital account transactions
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to permit foreigners to transfer funds abroad for permitted current or capital account transactions
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to permit NRI to transfer funds to India for permitted current or capital account transactions
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None of the above
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Detailed explanation-1: -The Liberalised Remittance Scheme (LRS) allows parents to transfer money to their children studying abroad. Any Indian resident can participate in it and transfer up to $250, 000 abroad in a financial year.
Detailed explanation-2: -Remittance facility under the scheme is prohibited for the following transactions: 1. Capital Account Transactions – Remittances directly or indirectly to countries identified by the Financial Action Task Force (FATF) as “non cooperative countries or territories” from time to time.
Detailed explanation-3: -The Scheme was introduced on February 4, 2004, with a limit of USD 25, 000. The LRS limit has been revised in stages consistent with prevailing macro and micro economic conditions. In case of remitter being a minor, the LRS declaration form must be countersigned by the minor’s natural guardian.
Detailed explanation-4: -The following are the permissible Capital account transactions under LRS: Opening of foreign currency account abroad with a bank outside India. Purchase of property abroad. Investments in shares, securities, mutual funds, etc abroad.