The   Reserve Bank of India removed restrictions on individuals from opening interest-earning Foreign Currency Accounts (FCA) in order to  make India’s International Financial Services Centre (IFSC) more attractive under which it has  removed the condition of repatriating any funds lying idle in the FCA account for a period of up to _______.

Solution

With an aim to make India’s International Financial Services Centre (IFSC) more attractive, the Reserve Bank of India removed restrictions on individuals from opening interest-earning Foreign Currency Accounts (FCA).   Further, the central bank removed the condition of repatriating any funds lying idle in the FCA account for a period of up to 15 days.   In February 2021, the RBI allowed resident individuals to make remittances under the Liberalised Remittance Scheme (LRS) to IFSCs set up in India. However, the remittances were to be made only for making investments in IFSC securities.    Moreover, only a non-interest-bearing FCA was allowed in IFSCs under LRS. And any funds lying idle in the account for a period up to 15 days from the date of its receipt were to be immediately transferred back to the domestic account of the investor in India.