Can a person send funds abroad from India freely for any reason without any restrictions?
The answer is a big “NO”. You are allowed to make international transactions only for the purposes listed by RBI.
So a remitter must always mention the reason to the bank or service provider.
Read on to learn about the 10 valid personal purposes for Indians to send money abroad.
Also Read: 8 Mistakes To Avoid When Transferring Money From India
10 Valid Purposes for Money Transfer from India
1. Overseas University Fee Payment
Numerous Indian students join overseas universities and reside abroad.
As part of the enrollment process, the students or their parents have to transfer money into the university’s bank account for tuition, hostel, membership fees, etc.
2. GIC/ Blocked Account Deposit
GIC (Guaranteed Investment Certificate) is an investment account in a Canadian bank for international students studying in Canada.
Similar to GIC is the Blocked Account. It is a special type of bank account in Germany, for international students coming to study there.
In both the GIC and Blocked Account, the money invested in it this specific sum will be used to cover the monthly expenses of the students during their study period in the country.
Also Read: Canada Doubles GIC Amount in 2024 To $20,635: Indian Students Impacted
3. Fee for Participation in Global Conferences/Training
If you are planning to go to another country to attend a global conference or training program as a part of your profession you can pay all the related fees to the overseas organiser by international money transfer.
4. Living Expenses of Student Abroad
Indian students staying abroad sometimes need financial assistance for their living expenses there. For this purpose, the RBI permits the immediate relatives of the student such as parents, siblings or spouse to send money to them.
5. Maintenance of Close Relative Abroad
Apart from Indian students living abroad, the RBI also allows Indians to send money to their close relatives residing in a foreign country.
Close relatives are defined as;
- Father (or stepfather)
- Mother (or stepmother)
- Son (or stepson)
- Son-in-law
- Daughter
- Daughter-in-law
- Brother (or step-brother)
- Sister (or stepsister)
6. Gift Remittance
If you wish to send money to someone out of your immediate family circle, such as your friend, you can transfer the fund under this purpose.
7. Emigration Consultancy Fee
People planning to migrate to a new country often have to send money to an emigration consultancy or firm abroad. The RBI has provision for money transfers from India for this specific purpose.
8. Visa Fees
For any visa type such as a student visa, tourist visa, or work visa, a person must pay the visa processing fee to the immigration department of your destination country. RBI allows these payments.
9. Medical Treatment Abroad
Medical emergencies are unpredictable. A person travelling abroad may require immediate medical attention and payments may have to be made from India for this. Additionally, some people travel abroad for expert consultations and treatments.
You can do international money transfers for medical emergencies and treatment of you or your dear ones under this purpose.
10. NRI Repatriation
When an NRI generates domestic income in India they can transfer those funds to their bank account abroad. This process is called NRI repatriation and is allowed by the RBI.
Also Read: How Can NRIs Transfer Money From India – Complete Guide
RBI Codes for the Top 10 Purposes
These codes are used by the bank or the money transfer services initiating the transfer from India. They indicate the purpose of transfer.
Purpose codes are input in the “Wire Transfer/Telegraphic Transfer” message generated under the SWIFT network.
| Sl.No | Purpose | RBI Code |
| 1. | Overseas Education University Account | S1107 |
| 2. | GIC/ Blocked Account Deposit | S0023 |
| 3. | Fee for Participation in Global Conferences/Training | S0301 |
| 4. | Overseas Education Student Account | S1301 |
| 5. | Maintenance of Close Relative Abroad | S1301 |
| 6. | Gift Remittance | S1302 |
| 7. | Emigration Consultancy Fee | S1012 |
| 8. | Visa Fees | S1012 |
| 9. | Medical Treatment | S1108 |
| 10. | NRI Repatriation | S0014 |
Purposes Prohibited by RBI For International Money Transfer
These purposes are forbidden for Indian citizens/individuals under the Liberalized Remittance Scheme (which is among the RBI rules governing money transfers abroad);
- Purchase of lottery tickets, sweepstakes or banned magazines
- Investing in Foreign Currency Convertible Bonds (FCCBs) issued by Indian firms in the international secondary market
- Conducting foreign trade overseas
- Transfer to countries recognised by the Financial Action Task Force (FATF) as non-cooperative countries and territories.
- Payment to individuals and entities identified as high risks for engaging in acts of terrorism, as separately advised by the Reserve Bank of India (RBI).
- Gifting by a resident to another resident in foreign currency for the credit of the latter’s foreign currency account held abroad under LRS.
Why Provide the Purpose of Transfer?
- RBI has set different restrictions depending on the transactions. Therefore, mentioning the purpose is part of the KYC (Know Your Customer) procedure and is essential for the RBI to verify and regulate the transactions.
- International transactions come with tax implications for both the sender and the beneficiary (if applicable). Specifying the purpose helps the authorities in applying appropriate tax charges.
- Overseas remittances can be misused for money laundering, terrorist funding, and other illegal activities. By acknowledging the purpose the authorities can track and monitor the inflow and outflow of funds as per the AML (Anti-Money Laundering) regulations.
Knowing these rules shall help you in the timely execution of your international transactions and avoid unnecessary legal implications.
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Ann Mariya Job is the Associate Content Writer at ExTravelMoney.com. Holding a Bachelor’s in Journalism, she excels in creating deeply researched, engaging, and crisp content. Her work helps readers understand the complexities of foreign exchange, overseas money transfers, and international travel.