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NRI can now open joint accounts with resident Indian

Friday, 16 September 2011 14:17

Source: The Times of India

Liberalising the foreign exchange rules, the Reserve Bank today allowed NRIs to hold joint account with Indian residents, a move that would help increase remittances.

The central bank has also permitted sale proceeds of foreign investments in India to accrue to NRE/FCNR accounts after tax deductions, under the Foreign Exchange Management Act.
Foreign Currency Non-Resident (FCNR) account and Non-Resident External (NRE) account are opened by Non-Resident Indians (NRIs) with the Indian banks.

As per the recommendations of the committee constituted to review facilities available under FEMA, the central bank has taken such steps.

RBI has allowed residents of India to include non-resident close relative in their resident bank accounts on 'former or survivor' basis. However, such non-resident relative shall not be eligible to operate the account during resident's lifetime, it said in a notification.

It also permitted NRIs to open NRE/FCNR account with their resident close relative. In this case, the resident relative can operate the account as a power of attorney holder.

Similarly, the central bank has doubled the slab under which securities worth USD 50,000 per fiscal can be transferred by resident Indians to non-resident individuals 'by way of gift' from the present level of USD 25,000.

RBI has also allowed resident individuals to include resident close relative in their EEFC (Exchange Earners Foreign Currency) or RFC(Resident Foreign Currency) as a joint account holder.