Foreigners can re-designate accounts as non-resident: RBI
With a view to facilitating easy repatriation of money by foreign workers, estimated to be up to USD 1 million annually, the Reserve Bank on Thursday allowed foreign nationals, who have left India, to re-designate their bank accounts as 'Non-Resident' for receiving their dues.india Updated: Jun 09, 2011 20:57 IST
With a view to facilitating easy repatriation of money by foreign workers, estimated to be up to USD 1 million annually, the Reserve Bank on Thursday allowed foreign nationals, who have left India, to re-designate their bank accounts as 'Non-Resident' for receiving their dues.
"The extant instructions have been reviewed so as to facilitate the foreign nationals to collect their pending dues in India," RBI said in a circular. "... banks may, therefore, permit such foreign nationals to re-designate their resident account maintained in India as Non-Resident Ordinary (NRO) account on leaving the country after their employment to enable them to receive their pending bona fide dues," it added.
As per the old rules, foreign nationals employed in India were eligible to maintain resident accounts with an Indian bank. However, the banks were required to close the resident accounts of such foreign nationals once they left, and transfer their assets to overseas accounts.
RBI said, however, that banks should obtain full details from the account-holders about their dues before facilitating any re-designation. Besides, funds credited to the NRO account should be repatriated abroad immediately after scrutiny regarding payment of taxes in India.
"The amount repatriated abroad should not exceed USD one million per financial year... The debit to the account should be only for the purpose of repatriation to the account holder's account maintained abroad," the circular said.
It also directed banks to put in place proper internal control mechanism to monitor the credits and debits to this account and to close such accounts immediately after all the dues have been received and repatriated.