The money sent abroad under the RBI's liberalised remittance scheme (LRS) in the current financial year is more than the past three years put together, say reports.
The data released by the RBI show that outward remittances have tripled to $4 billion in fiscal 2015-16. The surge in remittances have surprised economic experts and analysts as they struggle to explain the phenomena.
“Indians have remitted more than $4 billion until February 2016, up from $1.32 billion in the last fiscal year ended March 2015,” The Economic Times reported.
RBI's LRS allows the resident Indians to invest overseas in assets and shares and send money for studies and maintenance of close relatives without pre-approval from the RBI. Under the rule, individuals, including minors, are allowed to freely remit up to $2,50,000 per financial year.
According to economic experts, the increased remittance limit under LRS and more and more students opting for higher abroad education are the key drivers of surging outward remittance.
The LRS limit was increased from $125,000 to $250,000 per person per year in February 2015 due to the record spike in foreign exchange reserves.
According to another newspaper report, the RBI has recorded an outflow of $1 billion in just nine months in remittances for students studying aboard.
“According to the RBI, remittances under the head ‘maintenance of close relatives’ and ‘studies abroad’ have risen sharply in the last nine months. While student remittances were a meagre $10.1 million in April, the outflow touched a high of $213 million in January,” reported The Indian Express.
The monthly remittances of 2015-16 have surpassed the full fiscal outflow of $440 million in the year 2007-08.