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

- **ID:** `banking/india-foreign-remittance-fema-limits`
- **Domain:** banking
- **Category:** regulatory_compliance
- **Error Code:** `RBI-LRS-001`
- **Verification:** ai_generated
- **Fix Rate:** 82%

## Root Cause

Under RBI's FEMA (Foreign Exchange Management Act), all resident Indian individuals must comply with the LRS scheme, which caps outward remittances at $250,000 per financial year and requires Form A2 and PAN card submission for any transfer above ₹50,000.

## Version Compatibility

| Version | Status | Introduced | Deprecated |
|---------|--------|------------|------------|
| FEMA 1999 (amended 2023) | active | — | — |
| RBI Master Direction on LRS 2022 | active | — | — |
| Form A2 v3.0 | active | — | — |

## Workarounds

1. **Ensure the user submits Form A2 (available from the bank or online banking portal) and PAN card copy for any remittance above ₹50,000; verify the cumulative amount for the financial year stays under $250,000.** (90% success)
   ```
   Ensure the user submits Form A2 (available from the bank or online banking portal) and PAN card copy for any remittance above ₹50,000; verify the cumulative amount for the financial year stays under $250,000.
   ```
2. **If the user needs to send more than $250,000, advise them to obtain prior approval from RBI under FEMA for higher remittances, which requires a detailed application explaining the purpose (e.g., education, medical treatment).** (70% success)
   ```
   If the user needs to send more than $250,000, advise them to obtain prior approval from RBI under FEMA for higher remittances, which requires a detailed application explaining the purpose (e.g., education, medical treatment).
   ```
3. **Use a foreign currency account (e.g., RFC or EEFC account) if the user has foreign income, which may be exempt from LRS limits under certain conditions.** (80% success)
   ```
   Use a foreign currency account (e.g., RFC or EEFC account) if the user has foreign income, which may be exempt from LRS limits under certain conditions.
   ```

## Dead Ends

- **Telling the user to split the remittance into multiple smaller transfers below ₹50,000 to avoid documentation** — RBI aggregate rules track total remittances per financial year across all banks; splitting doesn't bypass the limit and may trigger AML alerts. (85% fail)
- **Advising the user to use a non-bank money transfer service like Wise or PayPal** — These services are also regulated under FEMA and require the same LRS compliance for resident Indians; they may block transfers exceeding the limit. (75% fail)
- **Suggesting the user send money through a friend's account** — This violates FEMA anti-money laundering rules and can lead to account freezing and legal penalties for both parties. (95% fail)