RBI allows resident Indians to open foreign currency accounts in GIFT City

  • RBI decided to allow authorised persons to facilitate remittances for availing financial services or financial products as per the International Financial Services Centres Authority Act, 2019 within IFSCs.

Livemint, Written By Ankit Gohel
First Published11 Jul 2024, 07:54 AM IST
RBI allows resident Indians to open foreign currency accounts in GIFT City
RBI allows resident Indians to open foreign currency accounts in GIFT City

The Reserve Bank of India (RBI) has expanded the scope of remittances to International Financial Services Centres (IFSCs) under the Liberalised Remittance Scheme (LRS) allowing Indian residents to open foreign currency accounts in Gujarat International Finance Tec-City (GIFT City).

On Wednesday, RBI decided to allow authorised persons to facilitate remittances for availing financial services or financial products as per the International Financial Services Centres Authority Act, 2019 within IFSCs.

Also Read | RBI alarmed at lakhs of bank accounts being used for fraud: Report

The apex bank also permitted all current or capital account transactions, in any other foreign jurisdiction (other than IFSCs) through an Foreign Currency Account (FCA) held in IFSCs.

For these permissible purposes, resident individuals can open Foreign Currency Account (FCA) in IFSCs, RBI said in a release.

At present, remittances under LRS to IFSCs can be made only for making investments in IFSCs in securities except those issued by entities/ companies resident in India (outside IFSC) and payment of fees for education to foreign universities or foreign institutions in IFSCs for pursuing certain courses.

Also Read | Expert view: RBI rate cuts may lead to a more favourable borrowing environment

The latest move by the central bank will allow resident Indians to open a fixed deposit in foreign currency like dollars in a bank account in GIFT City. This is likely to provides greater flexibility for Indian residents to manage their foreign exchange transactions and facilitate seamless remittances.

“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,” said Tapan Ray, MD and Group CEO, GIFT City.

Also Read | RBI data says jobs grew in India, private surveys hinge on unemployment

According to Narinder Wadhwa, Managing Director of SKI Capital Services, the RBI’s decision will bolster GIFT City’s status as an international financial hub, attracting more global financial players and boosting overall economic activity in the region.

He believes by simplifying the process and enhancing the financial infrastructure, GIFT City can attract more foreign investments, which can contribute to economic growth and job creation.

“This move can lead to the development of sophisticated financial products and services tailored for both domestic and international markets, leveraging GIFT City’s regulatory advantages. By allowing a broader range of remittances, the RBI is promoting financial inclusion, enabling a larger section of the population to participate in global financial markets,” Wadhwa said.

Meanwhile, by opening accounts in GIFT city, Indian individuals will be able to keep their funds within the Indian financial system while still participating in global financial activities, noted Viram Shah, the Co-founder & CEO of Vested Finance.

“This development is seen as a positive step, especially for High Net Worth Individuals (HNIs) who currently tend to open accounts in financial hubs like Dubai and Singapore. Furthermore, this announcement is viewed as a progressive measure towards achieving full convertibility of the Indian rupee and establishing it as a truly global currency,” Shah said.

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.MoreLess
First Published:11 Jul 2024, 07:54 AM IST
HomeEconomyRBI allows resident Indians to open foreign currency accounts in GIFT City

Most Active Stocks

Indian Oil Corporation

174.50
03:59 PM | 11 JUL 2024
2.55 (1.48%)

Tata Steel

169.00
03:58 PM | 11 JUL 2024
1 (0.6%)

Bharat Petroleum Corporation

306.60
03:59 PM | 11 JUL 2024
6.25 (2.08%)

Oil & Natural Gas Corporation

304.80
03:57 PM | 11 JUL 2024
6.75 (2.26%)
More Active Stocks

Market Snapshot

  • Top Gainers
  • Top Losers
  • 52 Week High

Gujarat Pipavav Port

236.60
03:58 PM | 11 JUL 2024
16.85 (7.67%)

Oil India

551.45
03:58 PM | 11 JUL 2024
38.7 (7.55%)

Mazagon Dock Shipbuilders

5,739.10
03:55 PM | 11 JUL 2024
383.7 (7.16%)

Great Eastern Shipping Company

1,455.65
03:58 PM | 11 JUL 2024
93.9 (6.9%)
More from Top Gainers

Recommended For You

    More Recommendations

    Gold Prices

    • 24K
    • 22K
    Bangalore
    73,705.000.00
    Chennai
    74,722.000.00
    Delhi
    73,705.000.00
    Kolkata
    74,722.000.00

    Fuel Price

    • Petrol
    • Diesel
    Bangalore
    102.86/L0.00
    Chennai
    100.75/L0.00
    Kolkata
    104.95/L0.00
    New Delhi
    94.72/L0.00
    OPEN IN APP
    HomeMarketsPremiumInstant LoanMint Shorts