The Reserve Bank of India (RBI) has narrowed the definition of relatives under the ‘maintenance of close relative’ category of Liberalised Remittance Scheme (LRS) to check outflow of funds and prevent misuse of facility.

Henceforth, funds under this category can be sent only to immediate relatives such as parents, spouses, children and their spouses. LRS is facility provided by RBI for all resident individuals including minors to freely remit upto certain amount in terms of US Dollar for current and capital account purposes or combination of both. The scheme was introduced in February 2004 and its regulations are provided under Foreign Exchange Management Act (FEMA), 1999. After it was launched, the LRS limit was US $25,000, but it has been revised in stages consistent with prevailing macro and micro economic conditions. At present, LRS limit for all resident individuals, including minors, is US $2,50,000 (Rs. 1.5 crore) per financial year.