Reserve Bank of India binds NRIs and their relatives

Reserve Bank of India binds NRIs and their relatives
By GOPAL SUTAR
Published: Sep 20, 2011 02:57 Updated: Sep 20, 2011 02:57
BANGALORE: The Reserve Bank of India (RBI) has made a few changes in the Foreign Exchange Management Act (FEMA) to boost more cooperation between NRIs and their relatives.
The central bank has now allowed the relatives of non-resident Indians to bear the medical expenses of visiting NRI relatives.
The resident Indians have also been given permission to repay loans availed from banks in Indian rupees in India by their NRI relatives.
As per another notification, NRIs can also hold joint accounts with their Indian resident relatives.
This applies to Foreign Currency Non-Resident (FCNR) account and Non-Resident External (NRE) Rupee account.
Resident individuals are permitted to make gift in rupees to close NRI relatives.
The amount must be transferred by check or by electronic means.
The amount should be credited to the Non-Resident (Ordinary) Rupee Account (NRO) account of the NRI.
The gift amount needs to be within the overall limit of $200,000 per financial year as permitted under the Liberalized Remittance Scheme (LRS) for a resident individual.
It would be the responsibility of the resident donor to ensure that the gift amount being remitted is under the LRS and all the remittances under the LRS during the financial year including the gift amount do not exceed the limit prescribed.
According to the bank notifications, the necessary amendments related to FEMA are being carried out separately.
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