According to the Reserve Bank of India (RBI) latest data, outward remittances under its Liberalised Remittance Scheme (LRS) declined 10.15% Year-on-Year (Y-o-Y) to USD 22.82 billion in nine month (from April to December) of Financial Year 2024-25 (9MFY25), compared to USD 24.80 billion in 9MFY24.
- The data highlighted outward under the scheme declined across major segments such as: in deposits, maintenance of close relatives, and the international segment, among others.
Key Findings:
i.Increase in Outward Remittance in Q3FY25: As per the RBI’s data, outward remittances increased 3.3% Y-o-Y in 3rd Quarter (October-December) of FY25 to USD 6,670.4 million compared to same period last financial year.
ii.Decrease in Remittances for Deposits: The data showed that remittances for deposits decreased 43% Y-o-Y, to USD 422.28 million (in 9MFY24) against USD 738.12 million in the same period of previous financial year.
iii.Decline in Remittances of Close Relatives as well for Gifts: The RBI data revealed that remittances of close relatives dropped approximately 25.2% to USD 2,757 million and similarly, remittances for gifts decreased 21.38% to USD 2,215.5 million.
iv.Decrease in Outward Remittances from International Travel: As per the data, outward remittances from international travel dropped 2.23% Y-o-Y, to USD 13.10 billion from USD 13.40 billion registered in the previous year period.
v.Increase in Remittances for investments in equity and debt instruments: The data showed that remittances for investments in equity and debt instruments increased 2.09% Y-o-Y to USD 1,113.73 million.
About Liberalised Remittance Scheme (LRS):
i.The scheme was introduced by the RBI on 4th February, 2004, to simplify and streamline the process of remitting funds overseas.
ii.The scheme allowed all resident individuals (including minors) to freely remit up to USD 2,50,000 per financial year (April-March) for any permissible current or capital account transaction or a combination of both.
Recent Related News:
In January 2025, RBI tightened norms for imposing monetary penalties and compounding offences under the Payment and Settlement Systems Act (PSS Act, 2007). The new norms aim to consolidate and rationalize enforcement actions by the central bank.
- As per new rules, RBI has been empowered under Section 30 of the PSS Act, to impose a penalty not exceeding Rs 10 lakh or twice the amount involved in such contravention or default where such amount is quantifiable, whichever is more.
