RBI eases deposit norms for foreign missions, diplomats

Relaxing deposit regulations, the Reserve Bank today allowed foreign diplomatic missions and diplomatic personnel, their family members to open rupee or foreign currency accounts without any restrictions.

RBI said it has repealed and superseded regulations under the Foreign Exchange Management (Deposit) Regulations, 2000, in consultation with government.

"Accordingly, in consultation with Government, the said regulations have been repealed and superseded by the Foreign Exchange Management (Deposit) Regulations, 2016, hereinafter referred to as Deposit Regulations", it said in a notification.

"In terms of...Deposit Regulations, no restriction under these regulations shall be applicable for opening of rupee/ foreign currency deposit accounts by foreign diplomatic missions and diplomatic personnel or their family members in India with an Authorised Dealer in India", RBI said.

Also, no restrictions will be placed on deposits in rupees maintained by residents of Nepal and Bhutan and on any multilateral organisation, of which India is a member nation.

It will also cover the subsidiary/affiliate bodies and officials of such organisations in India, RBI said.

On Non-Resident (Ordinary) Rupee (NRO) account, it said any person resident outside India can open NRO account in Indian Rupee for bona fide transactions in rupees and the account can be maintained in any form such as savings, current, recurring or fixed deposit.

"Balances in the NRO account cannot be repatriated abroad except for current income of the account holder and up to USD 1 million per financial year by NRIs and PIOs. Funds can be transferred to the NRE account within the USD 1 million facility", RBI said.

And to facilitate foreign nationals to collect their pending dues in India, RBI allowed these nationals to re-designate their account in India as NRO account on leaving the country after their employment to receive their pending bonafide dues.

The funds credited to the NRO account should be repatriated abroad immediately, it added, subject to payment of applicable Income tax and other taxes in India.

"The amount repatriated abroad should not exceed USD one million per financial year", it added.

RBI also allowed banks to issue International Credit Cards (ICCs) to NRIs and PIOs.

Further, it also allowed for crediting the rupee gift/loan by a resident to a NRI/PIO relative in their NRO account within limits under Liberalized Remittance Scheme.

However, RBI clarified that individuals or entities of Pakistan or Bangladesh nationality/ownership will require its prior approval to open such accounts.

These regulations comes to effect from April 1, 2016.