# AI tells an Indian resident to send money abroad via a simple bank transfer without mentioning RBI's Liberalised Remittance Scheme (LRS) cap of $250,000 per financial year

- **ID:** `banking/fema-lrs-cap-250k`
- **Domain:** banking
- **Category:** config_error
- **Error Code:** `FEMA-ERR-200-LRS`
- **Verification:** ai_generated
- **Fix Rate:** 84%

## Root Cause

Under RBI's Liberalised Remittance Scheme (LRS), Indian residents can remit up to $250,000 per financial year for permissible current account transactions or capital account transactions; exceeding this limit requires RBI approval and triggers Form A2 reporting.

## Version Compatibility

| Version | Status | Introduced | Deprecated |
|---------|--------|------------|------------|
| RBI LRS Master Direction 2023 | active | — | — |
| Form A2 v2.1 | active | — | — |
| ICICI Bank LRS API v1.0 | active | — | — |

## Workarounds

1. **Use the RBI's LRS portal to track your annual limit: `curl -X GET "https://api.rbi.org.in/lrs/v1/limit?pan=ABCDE1234F&fy=2024-25" -H "Authorization: Bearer <token>"` and ensure cumulative remittances do not exceed $250,000** (90% success)
   ```
   Use the RBI's LRS portal to track your annual limit: `curl -X GET "https://api.rbi.org.in/lrs/v1/limit?pan=ABCDE1234F&fy=2024-25" -H "Authorization: Bearer <token>"` and ensure cumulative remittances do not exceed $250,000
   ```
2. **If the limit is exceeded, apply for RBI approval via the Form A2 with supporting documents (e.g., investment in overseas business) at least 30 days before the transfer** (72% success)
   ```
   If the limit is exceeded, apply for RBI approval via the Form A2 with supporting documents (e.g., investment in overseas business) at least 30 days before the transfer
   ```
3. **For amounts under $250,000, use a scheduled monthly transfer (e.g., $20,000 per month) to stay within the cap while meeting regular needs** (85% success)
   ```
   For amounts under $250,000, use a scheduled monthly transfer (e.g., $20,000 per month) to stay within the cap while meeting regular needs
   ```

## Dead Ends

- **Split the remittance across multiple banks to bypass the limit** — RBI's LRS tracking is centralized via the bank's Form A2 reporting; all banks report to RBI, and the total is aggregated across accounts (94% fail)
- **Use a foreign currency account abroad to hold funds beyond the cap** — Opening a foreign currency account without RBI approval violates FEMA; banks require LRS declaration for any transfer above $250,000 (88% fail)
- **Send money as a gift to a relative abroad without declaring it as LRS** — Gifts are considered capital account transactions under LRS and count toward the $250,000 limit; undeclared gifts are flagged by banks (85% fail)