The Reserve Bank of India (RBI) on Thursday announced modification of norms relating to bank accounts held by the non-resident Indians (NRI) and persons of Indian origin (PIO) in India.
This comes in the wake of recommendations of a committee constituted to review facilities for individuals under the Foreign Exchange Management Act (Fema), 1999. According to the RBI's notification, a permanent resident would be permitted to include a non-resident, close relative(s) in his resident bank account on a 'former or survivor' basis. However, he or she would not be eligible to operate the account in the life-time of the resident account-holder.
In another notification, RBI has said that the NRIs would be allowed to open NRE (non-resident external) or foreign currency non-resident bank deposits accounts [FCNR (B)] with their close resident relative on a 'former or survivor' basis, and the resident close relative shall be eligible to operate the account as a power-of-attorney-holder, in accordance with the extant instructions during the life time of the NRI/ PIO account-holder.
Also, the amount of securities that a resident Indian can be transfer to a person resident outside India, with the prior approval of the RBI, has been doubled to $50,000 per financial year.
Moreover, a resident Indian can now include a resident close relative as a joint-holder to operate his account during his life-time.
The sale proceeds of foreign investments in India were treated as eligible credit to NRE/FCNR (B) accounts, where the purchase consideration was paid by the NRI/PIO out of inward remittance or funds held in their NRE/FCNR (B) accounts and subject to applicable taxes, if any. The same facility would now be available to NRIs/PIOs.
