Liberalised Remittance Scheme: RBI Reportedly Proposes ₹50 Lakh Sub-Limit Within Annual Cap

The news

The Reserve Bank of India has reportedly proposed to the Ministry of Finance a ₹50 lakh sub-limit for select overseas remittances under the Liberalised Remittance Scheme, in an attempt to curb dollar outflows and support the rupee. The proposal, reported in November 2026, would operate within the existing annual ceiling of $250,000 per financial year rather than replace it. If implemented, the change would affect Indian residents who remit funds abroad for purposes such as travel, education, medical treatment and overseas investments.

The LRS, introduced by the RBI in 2004 under the Foreign Exchange Management Act, covers both current account and capital account transactions. Under the capital account, residents are permitted to open overseas foreign currency bank accounts, purchase property abroad, extend interest-free loans of up to one year, and invest in foreign equity, mutual funds and listed debt securities. The reported sub-limit is aimed at restricting eligible outflows that increase demand for foreign currency, thereby easing pressure on the rupee. Officials said the practical effect would depend on which transactions are covered and the final terms of any decision.

What is the Liberalised Remittance Scheme?

The Liberalised Remittance Scheme is a framework under the Foreign Exchange Management Act, introduced by the RBI in 2004. It allows resident individuals to remit foreign exchange abroad for permitted current and capital account transactions within a prescribed annual limit. Current account transactions include payments for travel, education and medical expenses, while capital account transactions cover opening overseas bank accounts, purchasing property, and investing in foreign equity, mutual funds and listed debt securities.

How would the sub-limit work and what is its aim?

The reported ₹50 lakh sub-limit would apply to select remittances within the broader $250,000 annual ceiling, rather than replacing it. By restricting eligible outflows, the measure is intended to reduce demand for foreign currency and help ease pressure on the rupee. Its actual impact would depend on which remittance purposes are covered and the final terms of any decision. Policymakers would need to balance exchange-rate concerns against residents' legitimate needs for overseas education, medical treatment and investment.