India Relaxes Banking Norms for Foreign Nationals

India Relaxes Banking Norms for Foreign Nationals


Here is the good news for foreign nationals employed in India holding valid visas. The Reserve Bank of India (RBI) has now decided to allow them to maintain resident accounts with authorized banks in India even after leaving the country. Earlier, their resident accounts were closed immediately once they left the Indian shores and their assets were transferred to their accounts maintained abroad. According to Dr. Sujatha Elizabeth Prasad, Chief General Manager-in-Charge of RBI when such persons leave India for a country other than Nepal or Bhutan for employment, business or for any other reasons for an uncertain period, their existing account would now be designated as a Non-Resident Ordinary (NRO) account. This is being done to facilitate the foreign nationals to collect their pending dues in India, she adds. The account would be closed immediately after all the dues are received and repatriated as per the declaration made by the account holder.

The banks have been directed to repatriate the funds credited to the NRO account immediately to the foreign national after verifying whether the account holder has paid applicable income and other taxes in India. However, the amount repatriated abroad cannot exceed US $ one million in a financial year. Scores of foreign nationals in India working in areas such as IT, banking and multinational firms would benefit with this RBI’s new regulation.