1 A LIBERALIZATION, FOREIGN INVESTMENT, ECB, LRS AND OTHER FEMA INITIATIVES, RECENT INITIATIVES IN THE BANKING SYSTEM, LIBERALIZATION MEASURES, ECB, TYPES OF ECB
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Foreign Exchange Facilities for Individuals — Foreign Exchange Facilities for Individuals.
One-liners from this chapter
Free sample — 8 of 66 rapid-fire Q&A cards.
What does FEMA stand for and when did it replace FERA?
FEMA stands for Foreign Exchange Management Act and it replaced FERA (Foreign Exchange Regulation Act) in the year 1999, shifting the approach from control to management of foreign exchange.
What is the full form of ECB in the context of Indian foreign exchange regulations?
External Commercial Borrowing — funds borrowed from overseas sources.
What is the Liberalised Remittance Scheme (LRS) and who is eligible to use it?
The Liberalised Remittance Scheme (LRS) allows all resident individuals, including minors, to remit up to USD 2,50,000 per financial year abroad for permissible current or capital account transactions.
What is the Track I framework under ECB meant for?
Medium-term foreign currency denominated ECB with minimum average maturity of 3-5 years.
What is the current LRS limit per financial year for a resident individual?
The current LRS limit is USD 2,50,000 per financial year per individual, and this limit is cumulative covering all permissible transactions under the scheme.
What is the Track II framework under ECB?
Long-term foreign currency denominated ECB with minimum average maturity of 10 years.
Can a resident individual purchase foreign currency for holding abroad under LRS?
Yes, under LRS a resident individual can acquire and hold foreign currency accounts abroad and also purchase foreign currency for permissible capital account transactions such as opening overseas bank accounts or making overseas investments.
What is Track III under the ECB framework introduced by RBI?
Indian Rupee-denominated ECB with minimum average maturity of 3-5 years.
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