Before the introduction of the Liberalised Remittance Scheme, the drawal of foreign exchange by a resident individual was governed by the Current Account Transaction Rules, 2000. These were divided into three distinct schedules. Schedule I covered completely prohibited transactions. Schedule II included transactions that required prior approval from the concerned Ministry of the Central Government. Schedule III listed permissible transactions with prescribed limits, beyond which approvals or additional procedures were necessary. Any current account transaction not mentioned in the three schedules was not subject to restriction or limit. This structure was supported by the Authorised Dealers Manual Circular No. 11 dated May 4, 2000.
Capital account transactions were handled separately. Remittances under this category were governed by various independent Capital Account Notifications, each specific to the nature of the permissible capital account transaction.
Introduction of the Liberalised Remittance Scheme
The Liberalised Remittance Scheme was introduced on February 4, 2004, with an initial remittance limit of USD 25,000 per financial year for resident individuals. The scheme was a significant policy shift that supported partial capital account convertibility. It allowed resident individuals to remit funds overseas for permitted current or capital account transactions or a combination of both. Initially, LRS was offered in addition to the limits specified under Schedule III of the Current Account Transaction Rules for certain categories.
Subsequently, through AP Dir. Circular 24 dated December 20, 2006, the Reserve Bank of India streamlined the process by bringing the Schedule III facilities under the overall LRS limit. All releases of foreign exchange for resident individuals under Paragraph 1 of Schedule III, as amended over time, became subject to the consolidated LRS limit.
Before further clarification is issued by the RBI in AP Dir. Circular 24 and Notification No. 282, both dated August 14, 2013, along with Notification FEMA 263/RB-2013 dated August 5, 2013, it was widely perceived that capital account transactions specified under FEMA were allowed without restriction, even if not explicitly mentioned under the Capital Account Notifications. This misinterpretation included actions like setting up an entity outside India for strategic purposes, which were not always in line with the legal framework.
Over the years, the LRS limit has seen gradual increases. However, between August 2013 and May 2015, the limit was temporarily reduced due to concerns over depleting foreign exchange reserves. Additionally, remittances made from the Exchange Earners’ Foreign Currency and Resident Foreign Currency accounts are now included within the LRS ceiling.
Historical Changes in LRS Limits
The LRS limits have evolved as follows. On February 4, 2004, the limit was set at USD 25,000. It increased to USD 50,000 on December 20, 2006. On May 8, 2007, it was raised to USD 100,000. It doubled to USD 200,000 on September 26, 2007. In response to a balance of payments crisis, it was temporarily reduced to USD 75,000 on August 14, 2013. Later, it increased to USD 125,000 on June 3, 2014, and further to USD 250,000 on May 26, 2015, which remains the current limit.
Eligible Individuals and Consolidation
The scheme is available to all resident individuals. Under LRS, remittances made by members of a family can be consolidated for ease of planning and execution. However, consolidation is not allowed for capital account transactions such as opening a foreign bank account or making an investment, unless the family members are joint owners or co-partners in the transaction.
Resident individuals are not permitted to gift funds in foreign currency to another resident individual for credit to the recipient’s foreign currency account abroad under the LRS. Each resident individual must remit funds independently under the scheme for such purposes.
Treatment of International Credit Card Transactions
The use of international credit cards for making payments while abroad was proposed to be brought under the ambit of the LRS through an e-gazette notification dated May 16. However, a press release dated June 28, 2023, clarified that the classification of international credit card usage for overseas transactions would remain outside the purview of LRS until September 30, 2023. As a result, such payments were not subject to LRS limits or the provisions of Tax Collected at Source under Section 206C(1G) until October 1, 2023.
Prohibited Transactions Under the Liberalised Remittance Scheme
Certain transactions are strictly prohibited under the LRS. These include any purpose specifically prohibited under Schedule I of the Foreign Exchange Management (Current Account Transactions) Rules, 2000, such as purchasing lottery tickets, sweepstakes, and banned magazines. Any transaction restricted under Schedule II also cannot be undertaken without proper approval.
Furthermore, remittances for transactions not permissible under the Foreign Exchange Management Act, such as sending margins or margin calls to overseas exchanges or counterparties, are prohibited under LRS. Residents cannot remit funds for purchasing Foreign Currency Convertible Bonds issued by Indian companies in the overseas secondary market. Also, trading in foreign exchange abroad is not allowed.
Capital account remittances made directly or indirectly to countries identified by the Financial Action Task Force as non-cooperative countries and territories are prohibited. Similarly, remittances to individuals or entities flagged by the RBI as posing a significant terrorism risk are not permitted under the scheme.
Current and Capital Account Transactions
General Understanding
The Foreign Exchange Management Act distinguishes between current and capital account transactions. This distinction is critical because it determines the types of transactions that can be undertaken freely, those that are permitted with limits, and those that require prior approval.
Definition of Capital Account Transactions
As defined in Section 2(e) of the Foreign Exchange Management Act, a capital account transaction alters the assets or liabilities, including contingent liabilities, outside India of persons resident in India or within India of persons resident outside India. It also includes transactions specified in subsection 3 of Section 6 of the Act.
Definition of Current Account Transactions
Under Section 2(j) of the Foreign Exchange Management Act, a current account transaction is defined as any transaction other than a capital account transaction. This definition is further clarified to include payments due in connection with foreign trade, services, short-term banking and credit facilities, interest on loans, income from investments, remittances for family support, foreign travel, education, and medical care.
Permissible Current and Capital Account Transactions
Under current account transactions, permissible uses of the LRS include private visits to any country other than Nepal and Bhutan, gifts or donations, going abroad for employment, emigration, maintenance of close relatives abroad, business travel, medical treatment, studies abroad, and other allowable current account uses. In specific cases such as emigration, medical treatment, or education, residents can exceed the standard LRS limit if justified by the receiving country or institution.
Under capital account transactions, resident individuals can use the LRS to open foreign currency accounts abroad, acquire immovable property, make overseas direct investments, and extend loans to non-resident Indian relatives. These transactions are subject to the rules and limits specified under the Overseas Investment Rules and relevant RBI directions.
Private Visits and Gifting
Resident individuals may use the LRS for private visits abroad, excluding Nepal and Bhutan. The annual limit of USD 250,000 applies regardless of the number of trips in a year. All expenses related to travel, including transportation and accommodation, must be within the LRS limit. The payment to tour operators can be made in either Indian rupees or foreign currency.
Residents may gift up to USD 250,000 per financial year to individuals residing outside India or donate to foreign organisations. If gifting in Indian rupees, it must be done by a crossed cheque or electronic transfer, and the amount must be credited to the NRO account of the non-resident recipient. These rupee gifts are also considered within the LRS ceiling.
Employment Abroad
A resident going abroad for employment can obtain up to USD 250,000 from an Authorised Dealer in a financial year. This amount includes expenses for travel and settling abroad. If additional expenses are incurred, those must be substantiated and justified according to the specific purpose.
Emigration and Maintenance of Close Relatives
Residents planning to emigrate can draw foreign exchange up to the amount prescribed by the destination country or USD 250,000, whichever is lower. Remittances exceeding this limit are allowed only for incidental expenses and not for investments that could earn points for immigration purposes, such as investments in foreign government bonds or real estate.
Resident individuals may remit up to USD 250,000 per year for the maintenance of close relatives abroad. The term relative is defined according to Section 2(77) of the Companies Act, 2013.
Business Travel
Residents undertaking international travel for business purposes, such as attending conferences, training, or apprenticeships, can use LRS up to the USD 250,000 limit per year. The number of such visits is not restricted under LRS. However, if an entity bears the expenses of its employee’s international travel, that amount is considered a residual current account transaction outside the LRS scope and is subject to the Authorised Dealer’s due diligence.
Medical Treatment Abroad
Authorised Dealers may release up to USD 250,000 per financial year for medical treatment abroad without requiring an estimate from the hospital or doctor. For remittances exceeding this limit, a cost estimate from a medical institution in India or abroad must be provided. If the patient becomes ill after arriving abroad, Authorised Dealers can release the necessary foreign exchange without RBI’s prior approval. In addition, an individual may draw up to USD 250,000 annually for accompanying a patient abroad as an attendant.
Permissible Capital Account Transactions Under LRS
The Liberalised Remittance Scheme permits residents to make certain capital account transactions within the prescribed limit. These include the acquisition of immovable property abroad, investment in shares or debt instruments in foreign companies, setting up wholly owned subsidiaries and joint ventures outside India, and extending loans to non-resident relatives as defined in the Companies Act, 2013. Investments under LRS are permitted in both listed and unlisted equities, debt instruments, and other permissible assets. Residents are also allowed to open, maintain, and hold foreign currency accounts abroad for making investments. However, all such transactions must comply with the regulations laid out by the Reserve Bank of India and must not involve countries identified as non-cooperative by the Financial Action Task Force (FATF). The remittances cannot be used to acquire financial products linked to the Indian rupee.
Permissible Current Account Transactions Under LRS
Under LRS, individuals may remit funds for permissible current account transactions such as private visits, gifts and donations, going abroad for employment, emigration, maintenance of close relatives abroad, travel for medical treatment, studies abroad, and other similar purposes. The use of funds for medical and educational expenses is broadly allowed, provided documentary evidence is submitted to authorised dealers. In the case of studies abroad, the remittance includes both tuition fees and living expenses. The remittance towards gifts and donations must also fall within the LRS limit. All such transactions must be routed through authorised dealers and must comply with the foreign exchange laws, including any reporting or disclosure requirements set forth by the RBI.
Prohibited Transactions Under LRS
The Reserve Bank of India prohibits certain types of transactions under the LRS framework to safeguard the country’s financial system and to ensure alignment with international obligations. Individuals are not allowed to remit funds for trading in foreign exchange abroad, margin trading or leveraged trading, lottery tickets, sweepstakes, banned magazines, and other speculative purposes. The scheme also does not permit remittances to countries identified as non-cooperative by the FATF or to those under UN sanctions. The funds cannot be used for the purchase of real estate or investment in entities involved in activities prohibited under Indian laws, such as arms manufacturing or gambling. Further, remittance to residents in India or for re-lending or gifting to residents is also not allowed.
Procedure for Making a Remittance
To make a remittance under the LRS, the resident individual must approach an authorised dealer (typically a bank) with a duly filled-out application form. The individual must declare the purpose of the remittance and confirm that it falls within the LRS limit. The application form is supported by a declaration in Form A2 and the applicable Know Your Customer (KYC) documents. For remittances toward investments or capital account transactions, additional documentation may be required, such as proof of investment, PAN card, or foreign bank account details. The bank will verify the documents, ensure compliance with RBI regulations, and report the transaction in its periodic returns. Once approved, the remittance can be made through various channels,, including wire transfers, demand drafts, or foreign currency drafts.
KYC Norms and PAN Requirement
All remittances under LRS are subject to strict KYC norms enforced by the authorised dealers. The PAN (Permanent Account Number) issued by the Income Tax Department is mandatory for all capital account transactions and current account transactions exceeding a prescribed threshold. The PAN requirement helps ensure that the remittances are reported accurately for tax purposes and prevents misuse of the facility. The authorised dealer is responsible for verifying the PAN and ensuring that the total remittance by an individual does not exceed the LRS limit during the financial year. Any violation of the PAN requirement can result in rejection of the remittance request or imposition of penalties under the Foreign Exchange Management Act (FEMA), 1999.
Use of Credit Cards and International Debit Cards
Indian residents are permitted to use international debit cards, credit cards, and store-value cards to make payments for current account transactions abroad. However, the usage must be within the prescribed limit of the LRS and must not be used for capital account transactions unless specifically permitted. The RBI guidelines specify that all expenses incurred through these cards for purposes such as travel, education, or online purchases will be considered part of the LRS limit. Therefore, individuals must monitor their card usage to ensure that their total remittances, including card expenses, do not exceed the annual cap. Banks are responsible for reporting such usage to the RBI and must maintain appropriate records of all transactions.
Tax Collection at Source (TCS) on Foreign Remittances
With effect from October 1, 2023, a revised Tax Collection at Source (TCS) framework was implemented for foreign remittances under LRS. Under the Income Tax Act, TCS is applicable on remittances exceeding ₹7 lakh in a financial year. For education and medical purposes, the rate of TCS is 5%, while for other purposes like investment and overseas tour packages, the TCS rate may be higher, up to 20%. The TCS amount is collected by the authorised dealer at the time of remittance and can be claimed as credit while filing income tax returns. This amendment aims to widen the tax base and improve compliance but has also led to increased documentation and procedural requirements for individuals using the LRS facility.
Reporting Requirements and Compliance
Under the LRS, both the individual and the authorised dealer are responsible for ensuring compliance with reporting requirements. The authorised dealer must file a report of all transactions undertaken under LRS with the RBI through the Online Return Filing System (ORFS). Individuals are also required to disclose their foreign investments in their income tax returns, particularly in the Schedule FA (Foreign Assets) of the ITR forms. Non-disclosure or misreporting of foreign assets can lead to penalties under the Income Tax Act, including prosecution in cases of willful evasion. Therefore, individuals must maintain proper records and consult tax professionals for guidance on cross-border transactions.
Role of Authorised Dealers
Authorised dealers play a pivotal role in the implementation of the LRS. They are the primary interface between the resident individuals and the Reserve Bank of India. Their responsibilities include verifying the remitter’s eligibility, collecting and validating documentation, monitoring the LRS limits, ensuring that transactions are not prohibited, and filing necessary reports with regulatory authorities. Dealers must also be vigilant against the use of multiple banking channels by an individual to exceed the permissible limit. They are required to aggregate the total remittances across all branches and report any suspected violations to the RBI. Failure to comply with these obligations can result in penalties or suspension of their authorised status.
Remittance for Education Abroad
One of the most commonly used purposes for LRS is to fund education abroad. Residents can remit funds for tuition, living expenses, accommodation, and other education-related costs. The remitter must provide admission letters, fee schedules, and other relevant documents to the authorised dealer. In the case of loans taken from banks for education, the interest and principal repayments made directly to the foreign educational institution are also covered under the LRS. This facilitates easy financial planning for students and their families. However, any misuse or misrepresentation of the purpose can attract penalties. Therefore, the purpose of education remittances must be clearly stated and properly documented.
Remittance for Medical Treatment
LRS permits remittances for medical treatment abroad, including costs related to hospitalization, surgery, medicines, and travel. In certain cases, a certificate from a doctor or hospital may be required to justify the need for treatment outside India. Authorised dealers may also ask for supporting documents such as a medical estimate or appointment letter from a hospital abroad. The remittance limit is the same as that under LRS, and individuals must provide an undertaking confirming the use of funds for legitimate medical purposes. This provision is especially beneficial for patients seeking specialized treatment not available in India.
Purchase of Property and Investment Abroad
Residents can purchase immovable property abroad under the capital account transactions permitted by LRS. This includes the acquisition of residential or commercial property in countries that are not on the RBI’s negative list. The individual must provide proof of remittance, property documents, and details of the transaction to the authorised dealer. In addition, investments in foreign companies, debt securities, mutual funds, and ETFs are permitted under LRS, subject to local laws in the destination country. The property must not be used for any unlawful activities, and the ownership must be disclosed in tax filings. Individuals are also advised to consult legal professionals to ensure compliance with foreign regulations.
Consequences of Non-Compliance
Violations of the LRS provisions, whether deliberate or inadvertent, can lead to severe consequences. Under FEMA, penalties for contravention can be up to three times the amount involved in the violation or ₹2 lakh, whichever is higher. In addition, the person may face further fines of ₹5,000 for every day the contravention continues. The RBI may also take action against authorised dealers who fail to comply with procedural requirements. The Income Tax Department may initiate separate action for non-disclosure of foreign assets, including prosecution under the Black Money Act. Therefore, strict compliance with all legal and procedural requirements is essential for both individuals and banks.
Amendments and Circulars Issued by RBI
The RBI periodically updates the LRS framework through circulars and notifications. These updates may relate to changes in the remittance limit, inclusion or exclusion of certain types of transactions, documentation requirements, or compliance procedures. For example, in May 2021, the RBI clarified that cryptocurrency transactions are not permitted under LRS. Similarly, the revised TCS provisions were implemented through changes in the Income Tax Rules. It is important for both individuals and authorised dealers to stay updated on such changes by regularly reviewing circulars issued on the RBI website. Failure to comply with updated rules may result in penalties, rejection of applications, or other enforcement actions.
Permissible Capital Account Transactions under LRS
Under LRS, the following capital account transactions are permitted: (a) Opening of foreign currency accounts abroad with a bank; (b) Purchase of property abroad; (c) Making investments in equity and debt instruments; (d) Acquisition of shares of foreign companies by way of: (i) professional services rendered or instead of director’s remuneration; or (ii) qualification shares; (e) Setting up wholly owned subsidiaries and joint ventures; (f) Extending loans including loans in Indian Rupees to non-resident Indians who are relatives as defined in the Companies Act, 2013.
Prohibited Transactions under LRS
The following transactions are prohibited under LRS: (a) Remittance for margins or margin calls to overseas exchanges or overseas counterparties; (b) Remittances for purchase of FCCBs issued by Indian companies in the overseas secondary market; (c) Remittance for trading in foreign exchange abroad; (d) Capital account remittances to countries identified by the Financial Action Task Force (FATF) as “non-cooperative countries and territories,” as updated from time to time, or any other country as may be prescribed; (e) Remittances directly or indirectly to individuals and entities identified as posing significant risk of committing acts of terrorism.
Requirements for Remittances under LRS
The remitter must designate a branch of an Authorized Dealer through which all remittances under LRS will be made. The Authorized Dealer should ensure that all transactions are made through this branch. The resident individual has to fill out Form A2 and submit it to the Authorized Dealer along with a declaration to the effect that the funds belong to the individual and will not be used for purposes prohibited or regulated under the LRS. The remitter also has to provide their PAN number for all such transactions.
Know Your Customer (KYC) and Due Diligence
The Authorized Dealer should conduct necessary due diligence and KYC of the remitter before undertaking the remittance under LRS. If the Authorized Dealer has reason to believe that a remittance is not being made by FEMA or the guidelines, it should not process the request. Instead, it should refer the case to the Reserve Bank of India (RBI) for further advice.
Facilities for Minors
The facility is also available to minors. In case of remitter being a minor, the Form A2 must be countersigned by the natural guardian. All remittances must comply with the terms and conditions mentioned under the LRS guidelines.
Gift and Donation under LRS
The LRS also permits residents to make remittances by way of gift or donation within the overall limit prescribed. In case of a gift to a non-resident Indian who is a relative as per the Companies Act, 2013, it would be considered as a permissible capital account transaction. In other cases, it would fall under the category of a current account transaction. Donations to charitable institutions abroad are also permitted, provided they do not fall under the prohibited list.
Investment by Resident Individuals in Overseas Companies
Resident individuals are permitted to acquire shares of a foreign company under LRS, including: (a) Acquisition of qualification shares of an overseas company for holding the post of a director; (b) Acquisition of shares of a foreign company under ESOP schemes; (c) Acquisition of shares under the employee stock option schemes if the overall LRS limit is not breached. Investments in units of mutual funds, venture capital funds, unrated debt securities, promissory notes, etc., are also permitted under LRS.
Establishing Joint Ventures or Wholly Owned Subsidiaries Abroad
Residents are allowed to set up Joint Ventures (JVs) or Wholly Owned Subsidiaries (WOS) abroad under the LRS route, provided the investment is within the permissible limit and for legitimate business activities. These investments must be reported to the RBI in the specified format within the prescribed timeline. Further, the Indian resident must ensure that the business of the JV/WOS is not engaged in real estate or banking, or any other sector prohibited by the RBI.
Loans to Non-Resident Indian (NRI) Relatives
Resident individuals are allowed to extend loans in Indian Rupees to NRI relatives under LRS. These loans must be interest-free and with a minimum maturity of one year. The loan amount must be within the overall LRS limit and used by the NRI relative for personal or business purposes, excluding activities prohibited by RBI.
Tax Implications under LRS
All remittances under LRS are subject to compliance with tax laws in India. The remitter is required to submit Form 15CA and, where applicable, Form 15CB, to the Authorized Dealer before making the remittance. These forms provide details of the income tax deducted at source (TDS) and other tax implications. The remitter should ensure that applicable taxes are paid in India before making the remittance. Further, the Finance Act 2020 introduced a new provision for tax collection at source (TCS) on remittances exceeding a specified threshold under LRS. This TCS must be collected by the Authorized Dealer at the time of remittance and deposited with the government.
Consequences of Non-Compliance Under LRS
Non-compliance with LRS rules can lead to severe consequences under the Foreign Exchange Management Act (FEMA), 1999. Individuals who violate the provisions may be penalized for contraventions. For example, if a person remits more than the prescribed limit or for a purpose not permitted under LRS, it would be considered a contravention of FEMA, and the person would be liable for a penalty. As per Section 13 of FEMA, the penalty could be up to thrice the amount involved in the contravention, where the amount is quantifiable. If not quantifiable, a penalty up to ₹2 lakh may be imposed. In addition to the penalty, any currency, security, or property involved in the contravention may be confiscated. In cases of repeated contravention, further penalties or prosecution may follow.
Common Errors Made by Individuals Under LRS
Several individuals make mistakes while remitting funds under LRS. Common errors include remitting amounts above the permissible limit, remitting funds for prohibited purposes, providing incorrect purpose codes while filling out Form A2, or failing to properly disclose the source of funds. Using LRS for investments or remittances that are later used for money laundering or tax evasion can result in scrutiny by tax authorities and enforcement agencies. Lack of awareness about the evolving regulations under LRS can lead to unintentional violations. Therefore, it is important to remain updated with RBI notifications and consult professionals when in doubt.
KYC and Due Diligence by AD Banks
Authorized Dealer (AD) banks are responsible for performing proper Know Your Customer (KYC) checks and due diligence before remitting funds under LRS. They must ensure that the remitter is an eligible resident individual, the remittance is within the overall limit, the purpose of the remittance is permitted under LRS, and the remitter has furnished a declaration in Form A2 and any other required documentation. AD banks must maintain proper records of remittances and report transactions to the RBI. They must also ensure that no remittance is made for margins or margin calls to overseas exchanges or overseas counterparties. In case of suspicion of misuse of the LRS facility, AD banks are required to report the matter to the Directorate of Enforcement or the Financial Intelligence Unit (FIU-IND).
Role of the Income Tax Department and PAN Linking
The Income Tax Department plays a crucial role in tracking remittances under LRS. Since the Permanent Account Number (PAN) is mandatory for making remittances under LRS, it allows the Income Tax Department to track the source of funds and ensure that applicable taxes have been paid. With the linkage of PAN to remittance transactions, individuals must ensure that they are reporting their foreign income and foreign assets in their income tax returns. Failure to do so could result in notices or scrutiny under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. Individuals remitting funds for investment purposes must report these assets in Schedule FA (Foreign Assets) in their income tax returns. Under-reporting or non-reporting could attract penalties and prosecution.
LRS and the Liberalization of India’s Capital Account
The LRS is seen as a step toward the gradual liberalization of India’s capital account. Capital account convertibility refers to the freedom to convert domestic financial assets into foreign financial assets and vice versa at market-determined exchange rates. While India has not achieved full capital account convertibility, LRS allows resident individuals to invest abroad, buy property, and maintain foreign bank accounts within limits, indicating a partial opening of the capital account. The government and RBI continue to monitor the macroeconomic environment and foreign exchange reserves before taking steps toward further liberalization. LRS, therefore, represents a balance between providing individuals with global financial access and maintaining control over foreign exchange outflows.
Recent Updates and Trends in LRS
Recent years have seen amendments and procedural updates to the LRS framework. For instance, the inclusion of international credit card usage in foreign countries within the LRS limit was introduced, withdrawn, and then clarified by the RBI. The introduction of Tax Collected at Source (TCS) under the Income Tax Act, 1961, on foreign remittances exceeding certain thresholds is a notable development. Effective from October 1, 2023, foreign remittances for purposes other than education and medical treatment exceeding ₹7 lakh attract TCS at the rate of 20%, unless the remitter can avail of lower or nil deduction under specified conditions. This has a significant impact on high-value remittances. Moreover, fintech platforms and digital banking channels have made it easier for resident individuals to remit money abroad under LRS. Mobile apps now offer KYC, compliance checks, currency conversion, and remittance features with real-time tracking. However, the ease of access must be matched with compliance and awareness to avoid inadvertent violations.
Conclusion
The Liberalised Remittance Scheme (LRS) offers a convenient mechanism for resident individuals to access global financial opportunities. Whether it’s funding a child’s education, investing in overseas assets, traveling, or maintaining a foreign currency account, LRS provides the legal channel for such remittances. However, it is equally important to understand the legal and procedural framework governing the scheme. Compliance with RBI guidelines, tax reporting requirements, and KYC norms ensures that remittances remain within the bounds of the law. As India progressively liberalizes its capital account, responsible usage of LRS will go a long way in building financial credibility and supporting the country’s macroeconomic stability.