RBI to set up a system for monitoring individuals who transfer money abroad

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The Reserve Bank of India (RBI) will soon start to sharply monitor people who transfer money to foreign countries on a regular basis for reasons such as investments, etc. They will be under firm examination by the central bank of the nation. This is being specifically done to make certain that anybody in India does not transfer above the prescribed limit, which is $250,000 for a year. This will include multiple transactions with various banks.

RBI

The RBI intends to implement a new arrangement in which all banks in the country will be required to send reports regarding each and every foreign fund transfer. This will be done under the Liberalised Remittance Scheme (LRS). These reports will have to be sent each day.

When all banks collate and send these reports, it can be confirmed that no remitter crosses the maximum transfer limit through different banks. This practice of creating daily reports with details about transfers to overseas organisations has been enforced for the purpose of effectively complying with the ceilings of the LRS.

The foreign exchange reserves of India reached a tremendous limit of $424.361 billion by March 30, 2018. The reserves increased by around $1.828 billion. With the forex reserves of the country increasing at length, the RBI has been encouraging individuals in India to transfer funds to foreign countries for different purposes.

As of now, a declaration made by the money transmitter serves as the only source of information about making transfers under the LRS. Banks allow such transfers depending on these declarations made by customers.

With the help of this new system of creating reports on a daily basis, banks will be fully aware of the transmittals that are already made to a foreign beneficiary. This, in turn, will assist in preventing remitters from violating the limits of the LRS.

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