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Indian investors lend abroad. Answer the following questions:
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Question : 17
Total: 19
In which sub-account and on which side of the Balance of Payments Account such lending is recorded? Give reasons.
Solution:
Sub-account-Capital Account.
Balance of payment account - Debit Side.
Lending to abroad by Indian investor will be recorded in the capital account on the debit side of balance of payment account. It is recorded on the debit side because it is the negative item in the capital account of balance of payment as it shows outflow of foreign currency from our country.
Balance of payment account - Debit Side.
Lending to abroad by Indian investor will be recorded in the capital account on the debit side of balance of payment account. It is recorded on the debit side because it is the negative item in the capital account of balance of payment as it shows outflow of foreign currency from our country.
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