Release of Foreign Exchange for Non-Trade Current Account Transactions under the Liberalised Remittance Scheme (LRS)
The Liberalised Remittance Scheme (LRS), introduced by the Reserve Bank of India (RBI), permits resident individuals in India to remit up to USD 250,000 per financial year for specified permissible transactions. These remittances may pertain to both current and capital account transactions, or a combination thereof, within the prescribed limit. This article outlines the provisions…
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Electronic Payment Systems in India
An electronic payment sometimes called a digital payment is a good alternative to traditional methods of cash payment and speeds up transaction cycles from person to person, person to business, person to government, Government to person, business to business, business to Government, etc. “Faceless, Paperless, Cashless” is one of the professed roles of the Digital…
Read article Understanding the types of capital account transactions permitted under LRS scheme
Liberalised Remittance Scheme is a scheme introduced by RBI as a liberalization measure to facilitate Resident Individuals (RI) to freely remit funds up to USD 2, 50,000/- outside India in a financial year (April to March) for any permissible current or capital account transaction or a combination of both. The remittances can be made in…
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Basic Exchange Rate Arithmetic Explained with Illustrations
IntroductionBasic exchange rate arithmetic involves converting one currency to another using the exchange rate. The fundamental formula for currency conversion is: a × b = cWhere: These transactions occur on the foreign exchange market (Forex market), where foreign currencies and coins are exchanged for the home currency. Exporters and importers needing foreign currency for business…
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Understanding Foreign Exchange Dealing Room Operations: Structure, Functions, and Regulatory Framework
IntroductionForeign exchange (FX) dealing room operations are central to the functioning of modern banking institutions, particularly those engaged in international trade and financial services. These operations involve the buying and selling of currencies to support the liquidity, profitability, and risk management objectives of banks. FX dealing rooms not only act as profit centers but also…
India’s Exchange Rate Mechanism: Structure, Evolution, and Central Bank Intervention
IntroductionAn Exchange Rate Mechanism (ERM) refers to a framework of procedures employed to regulate a country’s currency exchange rate relative to other currencies. It forms a critical component of a nation’s monetary policy and is typically administered by the central bank. While exchange rates are largely determined by global market dynamics—primarily the supply and demand…
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