Remittances issued under the Liberated Remittance System (LRS) to individuals increased by about 31 percent on an annual basis in July 2021 to reach $1.31 billion, mainly due to the increase in studies and travel expenses, according to the Reserve Bank of the Arab Republic of Egypt. Data for India (RBI).
Remittances amounted to $995.16 million in the same period last year.
This comes at a time when the global economy appears to be gradually recovering from the unprecedented turmoil caused by the Covid-19 epidemic.
Under RBI standards, all resident individuals, including minors, are allowed to freely transfer up to $250,000 per fiscal year (April-March) for any current transaction, capital account allowed, or a combination of both.
The scheme was submitted on February 4, 2004, with a maximum limit of $25,000 and revised in phases.
In July 2021, remittances abroad jumped about 53 percent year-on-year to $423 million. toward travel by 41 percent to $347 million; The value of the gift increased by 35 percent to $175 million; And about equity/debt investment by 48 percent to $50 million.
Remittances to support kin were roughly flat at $243 million.
T Rabi Sankar, Deputy Governor of the RBI, noted in a recent speech that the LRS for individuals, although open to both current and capital account transactions, is largely (more than 90 percent) in current account transactions such as travel and studies.
“Since the LRS scheme has been in operation for some time, there may be a need to review it taking into account changing requirements such as higher education for young people, requirements for start-ups, etc.
“There may be an issue to review whether the limit can remain uniform or can be linked to some economic variables for individuals,” he said.
Outward transfers under the LRS fell about 32 percent year-over-year (or $6.08 billion) in FY21 to $12.68 billion ($18.76 billion in FY22) with the outbreak.