India tightens regulations on overseas remittances
The Reserve Bank of India (RBI) is set to bring in stricter rules for Indians sending money overseas, especially for foreign currency deposits that come with lock-in periods. This is mainly to stop people from quietly moving large amounts of wealth abroad using the Liberalized Remittance Scheme (LRS), which currently lets you send up to $250,000 a year for things like education and investments.
RBI's concerns and the rationale behind the new rules
The RBI is worried that some folks are misusing the LRS to shift money out of India, which could hurt our foreign exchange reserves and make the rupee less stable. While recent tax tweaks tried to address this, these new changes are more about stopping sneaky wealth transfers—not about blocking legit investments like buying property or stocks. It's all part of making sure India's economy stays strong and future-proof.