New norms for outward remittance of money narrow definition of 'relative'

Altered rules aim at checking black money transactions and misuse of guidelines for commercial purposes

The Reserve Bank of India (RBI) has tightened the norms for outward remittance of money under the liberalised remittance scheme (LRS). 

Under the new rules, the definition of relatives to whom outward remittances can be made has been narrowed down. 

Earlier there was no insistence in submitting permanent account number (PAN) card for making current account transactions of up to $25,000. This has now been made mandatory for all remittances, irrespective of the amount. 

The applicable definition of ‘relatives’ for remittances under LRS will henceforth be according to the Companies Act, 2013, instead of the Companies Act, 1956.