India's 180-day overseas funds rule impacts resident banking

International banks in financial hubs such as Zurich, Singapore, London, and parts of West Asia are reportedly reviewing credit card arrangements for wealthy resident Indians. This reassessment stems from concerns regarding India’s Foreign Exchange Management Act (FEMA) and the requirement for resident individuals to use or repatriate unused foreign exchange within 180 days.

Under the Liberalised Remittance Scheme (LRS), Indian residents can remit up to USD 250,000 per financial year for purposes such as education, medical treatment, travel, and investments. Any foreign exchange acquired under this scheme that remains unused must generally be surrendered or brought back to India within 180 days.

However, these restrictions do not typically apply to Non-Resident Indians (NRIs) living in countries like the UAE. Because the rule targets “persons resident in India” under FEMA, NRIs can generally retain their locally earned salaries, business income, and savings in overseas accounts without being subject to the 180-day repatriation requirement.