Following a significant jump in outward remittances by individuals under the Liberalised Remittance Scheme (LRS) in the four month period between July and October, the remittance in the current financial year has crossed an all time high of 2 billion.
In line with the recent trend of increase in outflows, the outflows in the month of October 2015 stood at $412 million. It had hit an all time high of $457.5 million in September 2015.
Earlier, in July and August 2015 too, the remittance stood at a high of $380 million and $408 million respectively. According to the data released by RBI, the rise in remittance between July and September has been more than four times the average monthly remittance in the past which amounted to $100 mn. It has been driven by money sent for maintenance of relatives abroad and for study and travel purposes.
A senior RBI official said that the rise has also been because of the change in classification for disclosures of remittance by financial institutions.
The continued outflow in the month of October took the total outflows in the seven-month period between April and October 2015 to $2.04 billion. This is the highest in any financial year and is significantly higher than the total remittance under the LRS as it amounted to $1.32 billion in the whole of financial year 2014-15.
The sharp rise in the remittance comes on the back of an increased outflows for the purposes of foreign education, maintenance of relatives and travel. In October, the money remitted for maintenance of relatives amounted to $122 million and that for education stood at $101 million.
While the total money remitted abroad for travel purposes in 2014-15 stood at $11 million, just for September 2015, it amounted to $98 million and for October it stood at $68.7 million.
The unprecedented rise in remittances had came under the scrutiny of the Reserve Bank of India and the central bank had asked for data from the authorised dealers to understand the reason for this emerging trend.
A part of the jump is also being attributed to the upward revision in the limit of outward remittance for individuals by the Reserve Bank under the liberalized remittance scheme from $125,000 to $250,000 in February 2015.