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RBI eases norms for financial transactions by NRIs, PIOs

The Reserve Bank of India today eased norms for non-resident Indians and persons of Indian origin that will enable them to undertake financial transactions with the same ease as residents.

The central bank announced granting of permission to NRIs/PIOs to open bank accounts in India on par with the rupee accounts maintained by residents. They will now be permitted to open non-resident (special) rupee accounts with commercial banks in the country. They will also enjoy the same facilities and face similar restrictions applicable to the residents' accounts with regard to repatriation of funds held in these accounts and interest earned on them.

This scheme becomes effective from April 15.

The existing facilities for NRIs/PIOs to maintain and operate non-resident (ordinary) accounts, non-resident (external) and foreign currency non-resident accounts will continue with no change in norms regarding repatriation facilities.

The RBI granted general permission to NRIs and overseas corporate bodies to invest in air taxi operations, subject to approval of the directorate general of civil aviation. Such an investment will be allowed on a non-repatriation basis.

The RBI has also allowed resident individuals and partnership / proprietorship concerns to avail of interest-bearing rupee loans from NRIs/PIOs out of funds remitted by them from abroad or out of funds held in their bank accounts in the country on a non-repatriation basis.

The rate of interest on such loans should not exceed the bank rate plus two percentage points, said the central bank.

NRIs/PIOs have been permitted to gift shares held by them in Indian companies. PIOs have been allowed to gift immovable property held by them in India to registered charitable trusts / organisations, subject to compliance with the applicable rules/regulations including provisions of the Foreign Contribution Regulation Act by the concerned trust or organisation.

All domestic mutual funds have been permitted to issue units to NRIs/PIOs/OCBs on both repatriation and non-repatriation basis.

UNI

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