by Harish Gupta, National Editor, Lokmat Group
DRI & ED scanner on large overseas remittances
Harish Gupta
New Delhi, Sep 12
The government is considering tightening of the Liberalised Remittance Scheme (LRS) and other legitimate routes for remitting money abroad. The government's re-thinking came after the probe agencies brought to the notice massive outflow of funds abroad during the past couple of years through legitimate routes. The Probe agencies, in a meeting last week with the Ministry of Finance and the RBI had raised concern over the unusual trend.
The Directorate of Revenue Intelligence (DRI) and Enforcement Directorate have detected outflow of money abroad in large amount to four countries namely; Thailand, Dubai, Singapore and Hong Kong
A number of foreign exchange dealers have come under the scanner for alleged misuse of Liberalised Remittances Scheme (LRS) of the Reserve Bank of India (RBI). An individual is entitle to remit $250000 abroad without any question being asked by the banks. But it was noticed by the agencies that huge chunks in tranche have been remitted to these four countries only.
The ED & DRI have detected misuse of legal routes for remittance of the funds in foreign exchange which is considered laundering of money. Estimates suggest these countries have received Indian money of about Rs 20,000-30,000 crore in 2018 alone. Of this, Thailand alone has received Rs. 5000 crore.
In order to avoid regulatory attention, Forex dealers often create fake invoices under the LRS thereby blurring the identity of many accounts a source pointed out. “we have issued notices wherever we have come across such irregularities “ the official quoted earlier said.
According to RBI guidelines, resident Indians are allowed to remit an aggregate sum of Rs 250000 per financial year for any permissible current account or capital account transaction under the LRS without any approval from central bank. However, the RBI routinely seeks clarification wherever technical lapses are detected, Penalties are also imposed.The ED has issued many notices under the Prevention of Money Laundering Act (PMLA) for unaccounted wealth parked abroad, after global leaks including he HSBC Swiss list and Panama Papers showing names of Indians.
