Yesterday, January 23, 2023, The Reserve Bank of India (RBI) issued an order instructing the State Bank of Mauritius (SBM, India) to halt all transactions under the Liberalized Remittance Scheme (LRS) until further notice. And as you may know, Vested’s cost-effective instant funding product Vested Direct is powered by SBM India. As a result, we will pause processing fresh deposits via Vested Direct.

In the meantime you can use your existing bank accounts to deposit USD into your Vested brokerage accounts. Here is a short video on how to do that. You can continue to place trades and withdraw money easily. We are working towards enabling other easy deposit options via Vested Direct.

Transferring funds via existing Indian Bank Accounts | INR to USD

Here are answers to questions we have been receiving since yesterday. If you have any other questions, please call us, write to us at help@vestedfinance.co, or ping us on our live chat. We are here to help. 

How is Vested affected by RBI pausing LRS for SBM India?

As we mentioned above, Vested Direct, our unique fund transfer solution is powered by SBM India. With Vested Direct, we were able to reduce the overall cost of depositing funds to your US brokerage account and create a better user experience for you with instant funding.

However, the introduction of this ruling means we will not be processing any new deposits using Vested Direct in the interim. Our banking partners believe that it is a matter of time before they can start processing remittances again and that all remittances made through our processes till now have been compliant with the appropriate regulations. We are working hard to provide another low-cost and digital deposit solution on the Vested platform. We will keep you posted on any new updates as soon as we receive them.

In the meantime, you can continue buying and selling stocks as per normal. You can deposit funds using LRS remittance options provided via netbanking by your existing banks (here’s a short video on how to go about it). 

What is the impact on me as a US stocks investor on Vested?

Both your existing Vested Direct-SBM account and your Vested Brokerage account are secure. The only impact on you as an investor is that instead of using our low-cost and unique fund transfer solution, Vested Direct, you will need to use your existing bank accounts to load funds. 

Alternatively, you can also choose to withdraw funds from your Vested Brokerage account to your Vested Direct-SBM account. Since USD to INR withdrawals do not fall under the LRS, they will still be processed via our online withdrawals solution. 

What will happen to my holdings?

There is no impact on your US stock holdings. They are held securely in your US brokerage account with DriveWealth. Only the transfer of fresh funds to your US brokerage account via Vested Direct-SBM account is paused. You will still be able to place trades as per normal. 

Can we take money out of our Vested Direct-SBM account? 

Yes. Any INR deposits you have made are completely secure in your Vested Direct-SBM account. The only limits imposed by the RBI are on transferring funds abroad under the LRS. You can transfer funds from your SBM account to other Indian bank accounts using SBM India’s NetBanking service. If you need your CIF ID to access the netbanking platform, please reach out to us at help@vestedfinance.co.

Is the remittance restricted for all partners or only Vested? 

The RBI has suspended all outgoing remittances from SBM India. This affects all partners processing LRS transfers with SBM India, not just for investments but for other purposes as well. The transfers via Vested Direct will resume at some point; we will keep you posted along the way as and when there are updates.

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Our team members at Vested may own investments in some of the aforementioned companies/assets. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment or strategy will be suitable or profitable for an investor’s portfolio. Note that past performance is not indicative of future returns. Investing in the stock market carries risk; the value of your investment can go up, or down, returning less than your original investment. Tax laws are subject to change and may vary depending on your circumstances.

This article is meant to be informative and not to be taken as an investment advice, and may contain certain “forward-looking statements,” which may be identified by the use of such words as “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated,” “potential” and other similar terms. Examples of forward-looking statements include, without limitation, estimates with respect to financial condition, market developments, and the success or lack of success of particular investments (and may include such words as “crash” or “collapse”). All are subject to various factors, including, without limitation, general and local economic conditions, changing levels of competition within certain industries and markets, changes in interest rates, changes in legislation or regulation, and other economic, competitive, governmental, regulatory and technological factors that could cause actual results to differ materially from projected results.

This video is meant to be informative and not to be taken as an investment advice and may contain certain “forward-looking statements” which may be identified by the use of such words as “believe”, “expect”, “anticipate”, “should”, “planned”, “estimated”, “potential” and other similar terms. Examples of forward-looking statements include, without limitation, estimates with respect to financial condition, market developments, and the success of or lack of success of particular investments (and may include such words as “crash” or “collapse”.) All are subject to various factors, including, without limitation, general and local economic conditions, changing levels of competition within certain industries and markets, changes in interest rates, changes in legislation or regulation, and other economic, competitive, governmental, regulatory and technological factors that could cause actual results to differ materially from projected results.

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