RBI’s decision on LRS enhances attractiveness of GIFT IFSC: Ray

New Delhi, Jul 11 (PTI) The Reserve Bank has significantly enhanced the attractiveness and utility of GIFT IFSC by clarifying the use of LRS for investments and enabling transactions like insurance and education loan payments in foreign currency, said GIFT City MD and group CEO Tapan Ray on Thursday.

GIFT city (Gujarat International Finance Tec-City) located in Gandhinagar has been envisaged as an integrated hub for financial and technology services not just for India but for the world. India’s maiden International Financial Services Centre (IFSC) has been set up in GIFT City.

The Reserve Bank of India (RBI) on Wednesday issued a circular expanding the scope of norms related to remittances to International Financial Services Centres (IFSCs) under the Liberalised Remittance Scheme (LRS).

RBI said it has been decided that “authorised persons” may facilitate remittances for all permissible purposes under LRS to IFSCs for availing financial services or financial products as per the International Financial Services Centres Authority Act, 2019, within IFSCs.

“We at GIFT IFSC welcome the Reserve Bank of India’s recent circular expanding the scope of the LRS. This decisive move aligns GIFT IFSC with other global financial centres, allowing resident investors to leverage our platform for a wider range of overseas investments and expenditures,” he said.

By clarifying the use of LRS for investments and enabling transactions like insurance and education loan payments in foreign currency, Ray said the central bank has significantly enhanced the attractiveness and utility of GIFT IFSC.

The RBI’s decision will bolster GIFT IFSC’s role as a leading international financial services hub, he added.

On RBI’s circular, Narinder Wadhwa, Managing Director at SKI Capital, said the central bank’s decision to allow forex accounts in the GIFT City, into which money can be remitted for all purposes permitted under the LRS, is a significant step towards enhancing India’s international financial ecosystem.