New Delhi, Aug 14 (KNN)   In a move that can impact small entrepreneurs, the Reserve Bank today reduced the limit for remittances made by resident individuals under the Liberalised Remittance Scheme (LRS) to USD 75,000 from USD 200,000 per financial year. The decision is aimed at curtailing outflows of hard currency from the country and helping the rupee stabilise.

Also, no acquisition of immovable property outside India directly or indirectly will be allowed.

The measures have been taken, “keeping in view the current macroeconomic situation,” the RBI said in a statement.

It said, resident Individuals have, however, now been allowed to set up Joint Venture (JV)/Wholly Owned Subsidiary (WOS) outside India under the ODI  (Overseas Direct Investment) route within the revised LRS limit.

The central bank has also reduced the limit for Overseas Direct Investment (ODI) under automatic route for all fresh ODI transactions, from 400 per cent of the net worth of an Indian party to 100 per cent of its net worth.  

While current restrictions on the use of LRS for prohibited transactions, such as, margin trading and lottery would continue, use of LRS for acquisition of immovable property outside India directly or indirectly will, henceforth, not be allowed.

“The present set of measures is aimed at moderating outflows. However, any genuine requirement beyond these limits will continue to be considered by RBI under the approval route,” the central bank said. (KNN/PC)