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Frequently Asked Questions (FAQs)

Facilities for Non Resident Indians (NRIs) and Persons of Indian Origin (PIOs)

A Non Resident Indian (NRI) is a person resident outside India, who is a citizen of India or is a person of Indian origin.

A Person of Indian Origin (PIO) for this purpose is defined in Regulation 2 of FEMA Notification ibid as a citizen of any country other than Bangladesh or Pakistan, if (a) he at any time held Indian passport; or (b) he or either of his parents or any of his grandparents was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955); or (c) the person is a spouse of an Indian citizen or a person referred to in sub-clause (a) or (b).

'Close relative' means relative as defined in Section 6 of the Companies Act, 1956.

'A Person of Indian Origin' means an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan or Macau or Hong Kong) who (i) at any time, held an Indian Passport or (ii) who or either of whose father or mother or whose grandfather or grandmother was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).

For the purpose of acquisition and transfer of immovable property in India an NRI refers to an Indian Citizen resident outside India (Notification No. FEMA 21/2000_RBI dated May 3, 2000, as amended from time to time)

In terms of the Foreign Exchange Management Act (FEMA), 1999 a person resident outside India means a person who is not resident in India.

Ques 1: What types of services can be provided by a resident individual to his / her non-resident close relatives?
Ans:

A resident may make payment in rupees towards meeting expenses on account of boarding, lodging and services related thereto or travel to and from and within India of a person resident outside India who is on a visit to India. Further, where the medical expenses in respect of NRI close relative are paid by a resident individual, such a payment being in the nature of a resident to resident transaction may also be covered under the term “services”.

Ques 2: What types of services can be provided by a resident individual to his / her non-resident close relatives?
Ans:

A resident may make payment in rupees towards meeting expenses on account of boarding, lodging and services related thereto or travel to and from and within India of a person resident outside India who is on a visit to India. Further, where the medical expenses in respect of NRI close relative are paid by a resident individual, such a payment being in the nature of a resident to resident transaction may also be covered under the term “services”.

Ques 3: Can a resident individual give rupee gifts to his visiting NRI/PIO close relatives?
Ans:

Yes, a resident individual can give rupee gifts to his visiting NRI/PIO close relatives by way of crossed cheque/electronic transfer within the overall limit prescribed under Liberalised Remittance Scheme for the resident individual and the gifted amount should be credited to the beneficiary’s NRO account.

Ques 4: Can a resident individual give rupee gifts to his visiting NRI/PIO close relatives?
Ans:

Yes, a resident individual can give rupee gifts to his visiting NRI/PIO close relatives by way of crossed cheque/electronic transfer within the overall limit prescribed under Liberalised Remittance Scheme for the resident individual and the gifted amount should be credited to the beneficiary’s NRO account.

Ques 5: Can a resident individual gift shares/securities/convertible debentures etc to NRI close relative?
Ans:

Yes, a resident individual is permitted to gift shares/securities/convertible debentures etc to NRI close relative up to USD 50,000 per financial year subject to certain conditions.

Ques 6: Can a resident individual gift shares/securities/convertible debentures etc to NRI close relative?
Ans:

Yes, a resident individual is permitted to gift shares/securities/convertible debentures etc to NRI close relative up to USD 50,000 per financial year subject to certain conditions.

Ques 7: Can a resident individual holding a savings bank account include non-resident close relative as a joint account holder?
Ans:

Yes, individuals resident in India are permitted to include non-resident close relative(s) as a joint holder(s) in their resident bank accounts on ‘either or survivor’ basis subject to conditions.

Ques 8: Can a resident individual holding a savings bank account include non-resident close relative as a joint account holder?
Ans:

Yes, individuals resident in India are permitted to include non-resident close relative(s) as a joint holder(s) in their resident bank accounts on ‘either or survivor’ basis subject to conditions.

Ques 9: Resident Foreign Currency Account (RFC Account)
Ans:
  • A person resident in India may open, hold and maintain with an authorized dealer in India a Resident Foreign Currency Account.
  • Proceeds of assets held outside India at the time of return can be credited to RFC account.
  • The funds in RFC accounts are free from all restrictions regarding utilization of foreign currency balances including any restriction on investment in any form outside India.
  • RFC accounts can be maintained in the form of current or savings or term deposit accounts, where the account holder is an individual and in the form of current or term deposits in all other cases. RFC accounts are permitted o be held jointly with a close relative(s) as defined in the Companies ACT, 1956 as joint holder (s) in their RFC bank account on ‘former or survivor basis’. However, such resident Indian close relative, now being made eligible to become joint account holder shall not be eligible to operate the account during the life time of the resident account holder.
Ques 10: Resident Foreign Currency Account (RFC Account)
Ans:
  • A person resident in India may open, hold and maintain with an authorized dealer in India a Resident Foreign Currency Account.
  • Proceeds of assets held outside India at the time of return can be credited to RFC account.
  • The funds in RFC accounts are free from all restrictions regarding utilization of foreign currency balances including any restriction on investment in any form outside India.
  • RFC accounts can be maintained in the form of current or savings or term deposit accounts, where the account holder is an individual and in the form of current or term deposits in all other cases. RFC accounts are permitted o be held jointly with a close relative(s) as defined in the Companies ACT, 1956 as joint holder (s) in their RFC bank account on ‘former or survivor basis’. However, such resident Indian close relative, now being made eligible to become joint account holder shall not be eligible to operate the account during the life time of the resident account holder.
Ques 11: Facilities to returning NRIs/PIOs
Ans:
  1. Returning NRIs/PIOs may continue to hold, own, transfer or invest in foreign currency, foreign security or any immovable property situated outside India, if such currency, security or property was acquired, held or owned when resident outside India
  2. The income and sale proceeds of assets held abroad need not be repatriated
Ques 12: Facilities to returning NRIs/PIOs
Ans:
  1. Returning NRIs/PIOs may continue to hold, own, transfer or invest in foreign currency, foreign security or any immovable property situated outside India, if such currency, security or property was acquired, held or owned when resident outside India
  2. The income and sale proceeds of assets held abroad need not be repatriated
Liberalized Remittance Scheme

The Reserve Bank of India had announced a Liberalized Remittance Scheme (the Scheme) in February 2004 as a step towards further simplification and liberalization of the foreign exchange facilities available to resident individuals. With a view to further liberalise and rationalise the Liberalized Remittance Scheme(LRS) for resident individuals ,the Reserve Bank of India has increased the limit to USD 250000 per financial year

Ques 1: General facilities: Can Exchange Earners Foreign Currency (EEFC) accounts be held jointly with a -resident Indian?
Ans:

Yes, EEFC account of a resident individual can be held jointly with a resident close relative on a ‘former or survivor’ basis.
However, such resident Indian close relative will not be eligible to operate the account during the life time of the resident account holder.

Ques 2: General facilities: Can Exchange Earners Foreign Currency (EEFC) accounts be held jointly with a -resident Indian?
Ans:

Yes, EEFC account of a resident individual can be held jointly with a resident close relative on a ‘former or survivor’ basis.
However, such resident Indian close relative will not be eligible to operate the account during the life time of the resident account holder.

Ques 3: Foreign Currency Account
Ans:
  1. A person resident in India who has gone abroad for studies or who is on a visit to a foreign country may open, hold and maintain a Foreign Currency Account with a bank outside India during his stay outside India, provided that on his return to India, the balance in the account is repatriated to India. However, short visits to India by the student who has gone abroad for studies, before completion of his studies, shall not be treated as his return to India.
  2. A person resident in India who has gone out of India to participate in an exhibition/trade fair outside India may open, hold and maintain a Foreign Currency Account with a bank outside India for crediting the sale proceeds of goods on display in the exhibition/trade fair. However, the balance in the account should be repatriated to India through normal banking channels within a period of one month from the date of closure of the exhibition/trade fair.
Ques 4: Foreign Currency Account
Ans:
  1. A person resident in India who has gone abroad for studies or who is on a visit to a foreign country may open, hold and maintain a Foreign Currency Account with a bank outside India during his stay outside India, provided that on his return to India, the balance in the account is repatriated to India. However, short visits to India by the student who has gone abroad for studies, before completion of his studies, shall not be treated as his return to India.
  2. A person resident in India who has gone out of India to participate in an exhibition/trade fair outside India may open, hold and maintain a Foreign Currency Account with a bank outside India for crediting the sale proceeds of goods on display in the exhibition/trade fair. However, the balance in the account should be repatriated to India through normal banking channels within a period of one month from the date of closure of the exhibition/trade fair.
Ques 5: Repayment of Housing Loan of NRI / PIOs by close relatives of the borrower in India
Ans:
  1. Housing Loan in rupees availed of by NRIs/ PIOs from ADs / Housing Financial Institutions in India can be repaid by the close relatives in India of the borrower.


  2.  
Ques 6: Repayment of Housing Loan of NRI / PIOs by close relatives of the borrower in India
Ans:
  1. Housing Loan in rupees availed of by NRIs/ PIOs from ADs / Housing Financial Institutions in India can be repaid by the close relatives in India of the borrower.


  2.  
Ques 7: In respect of such investments, NRIs are eligible to repatriate:
Ans:
  1. the sale proceeds of immovable property in India if the property was acquired out of foreign exchange sources i.e. remitted through normal banking channels / by debit to NRE / FCNR (B) account.
  2. the amount to be repatriated should not exceed the amount paid for the property in foreign exchange received through normal banking channel or by debit to NRE account (foreign currency equivalent, as on the date of payment) or debit to FCNR (B) account.
  3. In the event of sale of immovable property, other than agricultural land / farm house / plantation property in India, by a person resident outside India who is a citizen of India / PIO, the repatriation of sale proceeds is restricted to not more than two residential properties subject to certain conditions.
  4. If the property was acquired out of Rupee sources, NRI or PIO may remit an amount up to USD one million per financial year out of the balances held in the NRO account (inclusive of sale proceeds of assets acquired by way of inheritance or settlement), for all the bonafide purposes to the satisfaction of the Authorized Dealer bank and subject to tax compliance.
  5. Refund of (a) application / earnest money / purchase consideration made by house-building agencies/seller on account of non-allotment of flats / plots and (b) cancellation of booking/deals for purchase of residential/commercial properties, together with interest, net of taxes, provided original payment is made out of NRE/FCNR (B) account/inward remittances.
Ques 8: In respect of such investments, NRIs are eligible to repatriate:
Ans:
  1. the sale proceeds of immovable property in India if the property was acquired out of foreign exchange sources i.e. remitted through normal banking channels / by debit to NRE / FCNR (B) account.
  2. the amount to be repatriated should not exceed the amount paid for the property in foreign exchange received through normal banking channel or by debit to NRE account (foreign currency equivalent, as on the date of payment) or debit to FCNR (B) account.
  3. In the event of sale of immovable property, other than agricultural land / farm house / plantation property in India, by a person resident outside India who is a citizen of India / PIO, the repatriation of sale proceeds is restricted to not more than two residential properties subject to certain conditions.
  4. If the property was acquired out of Rupee sources, NRI or PIO may remit an amount up to USD one million per financial year out of the balances held in the NRO account (inclusive of sale proceeds of assets acquired by way of inheritance or settlement), for all the bonafide purposes to the satisfaction of the Authorized Dealer bank and subject to tax compliance.
  5. Refund of (a) application / earnest money / purchase consideration made by house-building agencies/seller on account of non-allotment of flats / plots and (b) cancellation of booking/deals for purchase of residential/commercial properties, together with interest, net of taxes, provided original payment is made out of NRE/FCNR (B) account/inward remittances.
Ques 9: Investment in Immovable Property
Ans:
  1. NRI / PIO may acquire/transfer immovable property in India other than agricultural land/ plantation property or a farm house out of repatriable and / or non-repatriable funds.
  2. Foreign national of non-Indian origin resident outside India shall not acquire/transfer any immovable property in India other than on lease not exceeding five years, without prior approval of Reserve Bank of India.
  3. The payment of purchase price, if any, should be made out of
    1. Funds received in India through normal banking channels by way of inward remittance from any place outside India or
    2. Funds held in any non-resident account maintained in accordance with the provisions of the Act and the regulations made by the Reserve Bank.
    Note: No payment of purchase price for acquisition of immovable property shall be made either by Traveller’scheque or by foreign currency notes or by other mode other than those specifically permitted as above.
  4. NRI may acquire any immovable property in India other than agricultural land / farm house plantation property, by way of gift from a person resident in India or from a person resident outside India who is a citizen of India or from a person of Indian origin resident outside India
  5. NRI may acquire any immovable property in India by way of inheritance from a person resident outside India who had acquired such property in accordance with the provisions of the foreign exchange law in force at the time of acquisition by him or the provisions of these Regulations or from a person resident in India
  6. An NRI may transfer any immovable property in India to a person resident in India.
  7. NRI may transfer any immovable property other than agricultural or plantation property or farm house to a person resident outside India who is a citizen of India or to a person of Indian origin resident outside India.
Ques 10: Investment in Immovable Property
Ans:
  1. NRI / PIO may acquire/transfer immovable property in India other than agricultural land/ plantation property or a farm house out of repatriable and / or non-repatriable funds.
  2. Foreign national of non-Indian origin resident outside India shall not acquire/transfer any immovable property in India other than on lease not exceeding five years, without prior approval of Reserve Bank of India.
  3. The payment of purchase price, if any, should be made out of
    1. Funds received in India through normal banking channels by way of inward remittance from any place outside India or
    2. Funds held in any non-resident account maintained in accordance with the provisions of the Act and the regulations made by the Reserve Bank.
    Note: No payment of purchase price for acquisition of immovable property shall be made either by Traveller’scheque or by foreign currency notes or by other mode other than those specifically permitted as above.
  4. NRI may acquire any immovable property in India other than agricultural land / farm house plantation property, by way of gift from a person resident in India or from a person resident outside India who is a citizen of India or from a person of Indian origin resident outside India
  5. NRI may acquire any immovable property in India by way of inheritance from a person resident outside India who had acquired such property in accordance with the provisions of the foreign exchange law in force at the time of acquisition by him or the provisions of these Regulations or from a person resident in India
  6. An NRI may transfer any immovable property in India to a person resident in India.
  7. NRI may transfer any immovable property other than agricultural or plantation property or farm house to a person resident outside India who is a citizen of India or to a person of Indian origin resident outside India.
Ques 11: What are the other facilities available to NRIs/PIO? Investment facilities for NRIs
Ans:
  1. NRI may, without limit, purchase on repatriation basis:
    1. Government dated securities / Treasury bills
    2. Units of domestic mutual funds;
    3. onds issued by a public sector undertaking (PSU) in India.
    4. Non-convertible debentures of a company incorporated in India.
    5. erpetual debt instruments and debt capital instruments issued by banks in India.
    6. hares in Public Sector Enterprises being dis-invested by the Government of India provided the purchase is in accordance with the terms and conditions stipulated in the notice inviting bids.
    7. Shares and convertible debentures of Indian companies under the FDI scheme (including automatic route & FIPB), subject to the terms and conditions specified in Schedule 1 to the FEMA Notification No. 20/2000- RB dated May 3, 2000, as amended from time to time.
    8. hares and convertible debentures of Indian companies through stock exchange under Portfolio Investment Scheme, subject to the terms and conditions specified in Schedule 3 to the FEMA Notification No. 20/2000- RBI dated May 3, 2000, as amended from time to time.

    9. NRI may, without limit, purchase on non-repatriation basis:



    10.  
    11. Government dated securities / Treasury bills
    12. Units of domestic mutual funds
    13. Units of Money Market Mutual Funds
    14. National Plan/Savings Certificates
    15. Non-convertible debentures of a company incorporated in India
    16. Shares and convertible debentures of Indian companies through stock exchange under Portfolio Investment Scheme, subject to the terms and conditions specified in Schedules 3 and 4 to the FEMA Notification No. 20/2000- RBI dated May 3, 2000, as amended from time to time.
    17. Exchange traded derivative contracts approved by the SEBI, from time to time, out of INR funds held in India on non-­repatriable basis, subject to the limits prescribed by the SEBI.
    Note: NRIs are not permitted to invest in small savings or Public Provident Fund (PPF).
Ques 12: What are the other facilities available to NRIs/PIO? Investment facilities for NRIs
Ans:
  1. NRI may, without limit, purchase on repatriation basis:
    1. Government dated securities / Treasury bills
    2. Units of domestic mutual funds;
    3. onds issued by a public sector undertaking (PSU) in India.
    4. Non-convertible debentures of a company incorporated in India.
    5. erpetual debt instruments and debt capital instruments issued by banks in India.
    6. hares in Public Sector Enterprises being dis-invested by the Government of India provided the purchase is in accordance with the terms and conditions stipulated in the notice inviting bids.
    7. Shares and convertible debentures of Indian companies under the FDI scheme (including automatic route & FIPB), subject to the terms and conditions specified in Schedule 1 to the FEMA Notification No. 20/2000- RB dated May 3, 2000, as amended from time to time.
    8. hares and convertible debentures of Indian companies through stock exchange under Portfolio Investment Scheme, subject to the terms and conditions specified in Schedule 3 to the FEMA Notification No. 20/2000- RBI dated May 3, 2000, as amended from time to time.

    9. NRI may, without limit, purchase on non-repatriation basis:



    10.  
    11. Government dated securities / Treasury bills
    12. Units of domestic mutual funds
    13. Units of Money Market Mutual Funds
    14. National Plan/Savings Certificates
    15. Non-convertible debentures of a company incorporated in India
    16. Shares and convertible debentures of Indian companies through stock exchange under Portfolio Investment Scheme, subject to the terms and conditions specified in Schedules 3 and 4 to the FEMA Notification No. 20/2000- RBI dated May 3, 2000, as amended from time to time.
    17. Exchange traded derivative contracts approved by the SEBI, from time to time, out of INR funds held in India on non-­repatriable basis, subject to the limits prescribed by the SEBI.
    Note: NRIs are not permitted to invest in small savings or Public Provident Fund (PPF).
Ques 13: Can an individual resident repay loans of close relative NRIs to banks in India?
Ans:

Yes, where an authorized dealer in India has granted loan to a non-resident Indian such loans may also be repaid by resident close relative (relative as defined in Section 6 of the Companies Act, 1956), of the Non-Resident Indian by crediting the borrower's loan account through the bank account of such relative.

Ques 14: Can an individual resident repay loans of close relative NRIs to banks in India?
Ans:

Yes, where an authorized dealer in India has granted loan to a non-resident Indian such loans may also be repaid by resident close relative (relative as defined in Section 6 of the Companies Act, 1956), of the Non-Resident Indian by crediting the borrower's loan account through the bank account of such relative.

Ques 15: Can an individual resident lend money to his close relative NRI / PIO?
Ans:

Yes, an individual resident can lend money by way of crossed cheque /electronic transfer within the overall limit prescribed under the Liberalised Remittance Scheme, to meet the borrower’s personal or business requirements in India, subject to conditions. The loan should be interest free and have a maturity of minimum one year and cannot be remitted outside India.

Ques 16: Can an individual resident lend money to his close relative NRI / PIO?
Ans:

Yes, an individual resident can lend money by way of crossed cheque /electronic transfer within the overall limit prescribed under the Liberalised Remittance Scheme, to meet the borrower’s personal or business requirements in India, subject to conditions. The loan should be interest free and have a maturity of minimum one year and cannot be remitted outside India.

Ques 17: Can an individual resident Indian borrow money from his close relatives outside India?
Ans:

Yes, an individual resident Indian can borrow a sum not exceeding USD 250,000 or its equivalent from his close relatives staying outside India, subject to the conditions that:

  1. the minimum maturity period of the loan is one year;
  2. the loan is free of interest; and
  3. the amount of loan is received by inward remittance in free foreign exchange through normal banking channels or by debit to the NRE/FCNR(B) account of the NRI.
Ques 18: Can an individual resident Indian borrow money from his close relatives outside India?
Ans:

Yes, an individual resident Indian can borrow a sum not exceeding USD 250,000 or its equivalent from his close relatives staying outside India, subject to the conditions that:

  1. the minimum maturity period of the loan is one year;
  2. the loan is free of interest; and
  3. the amount of loan is received by inward remittance in free foreign exchange through normal banking channels or by debit to the NRE/FCNR(B) account of the NRI.
Ques 19: Is the permission of the Reserve Bank required for opening the various accounts, mentioned above, by Bangladesh / Pakistan individuals/entities?
Ans:

Opening of accounts by individuals/entities of Pakistan and entities of Bangladesh nationality requires prior approval of the Reserve Bank. All such requests may be referred to the General Manager, Foreign Exchange Department, Central Office Cell, Reserve Bank of India, 6 SansadMarg, New Delhi - 110 001. However, individuals of Bangladesh nationality are permitted to open NRO accounts without the prior approval of Reserve Bank of India, subject to conditions.

Ques 20: Is the permission of the Reserve Bank required for opening the various accounts, mentioned above, by Bangladesh / Pakistan individuals/entities?
Ans:

Opening of accounts by individuals/entities of Pakistan and entities of Bangladesh nationality requires prior approval of the Reserve Bank. All such requests may be referred to the General Manager, Foreign Exchange Department, Central Office Cell, Reserve Bank of India, 6 SansadMarg, New Delhi - 110 001. However, individuals of Bangladesh nationality are permitted to open NRO accounts without the prior approval of Reserve Bank of India, subject to conditions.

Ques 21: Synd Pravasi Pooji SB NRE Account
Ans:
Type of Account NRE Savings Bank Account
Non Resident (External) Rupee Account ( NRE) Savings Bank (SB)
Who can open NRIs / PIOs (other than person resident in Nepal and Bhutan) (such individuals from Bangladesh and Pakistan require prior approval of RBI)
Requirements  Copy of Passport with Visa Stamping
 Photographs of account holder/s
 Signatures to be verified by Indian Embassy
 Duly filled in Application form
 Remittance should be from foreign origin
 Provide Overseas and Local address, Landline no./mobile numbers, Fax, email ID
 PAN or Form 60 in lieu of PAN
Joint Account Joint accounts with NRIs/PIOs or with other residents (if they are close relatives) on “Former” or “Survivor” basis.
Currency of the account Indian Rupees
Sources of Funding the Account a) Funds remitted from abroad in any permitted currency through banking channels.
b) Depositing cheque/draft drawn in foreign currency; or INR draft drawn on Vostro Accounts maintained by foreign bank and exchange houses with Syndicate Bank.
c) Transfer from other NRE / FCNR accounts of the same account holder or another account holder with our Bank or other Banks accompanied by a certificate from paying bank.
d) Surrender of foreign currency / foreign currency travellers’ cheques to the Bank by the account holder in person, as per RBI guidelines.
Note: Third party TCs are not permitted.
Nomination Permitted
Minimum average balance (MAB) The NRI Customer is expected to maintain MAB of 50000/- p.m. Account can be opened with zero balance and to be funded within 30 days. 100/- will be charged for non-maintenance of MAB after 30 days of opening of account.
Requirement The NRI customer is required to maintain minimum FD for 100000/- - to be maintained till the currency of the NRE SB account.
Premium offers for the NRI customer a) Welcome kit for opening the account
b) SB account can be opened and maintained with zero balance. There are no charges for non-maintenance of minimum balance in the SB account upto a period of 30 days.
c) 24/7 dedicated helpdesk for NRI customers to be implemented shortly.
d) Speedy remittance services.
e) Prepaid Forex travel cards/VISA Cards/Master Cards
f) Preferential exchange rate.
g) No charges on statement of accounts. Monthly account statement will be sent through e-mail.
h) Net Banking, Mobile banking (Indian mobile only).
i) International debit cards – Total limit of 125000/- with sub-limit for ATM withdrawal 50000/- and POS limit of 125000/-.
j) Sweep In-Sweep Out facility – is optional. Balance in excess of 50000/- will be swept out to term deposit in units of 1000/- as minimum lot, for a period of
one year exact. In case of need, the deposit will be swept in to SB account on LIFO (Last in First Out) basis in required number of units of 1000/-, without any penalty and without any interest. No loan against the amount swept out and invested in FD. It cannot be taken as security for any other facility.
k) Free demand Drafts/RTGS/NEFT upto 100000/- per month from NRE account, free cheque collections upto 100000/- and cash withdrawals at non-base locations up to 50000/-
l) Preferential allotment of lockers with maximum concession of 25% on the locker rent, subject to availability.
m) Free Safe Deposit Receipt keeping and facility to send scanned copy immediately to the customer through e-mail.
n) Facility to open NRO account with zero balance and can be funded later, i.e., within a maximum period of 30 days.
o) 100/- p.m. will be levied for non-maintenance of average balance of 50000/- in SB NRE account beyond 30 days period.
p) OTP in International mobile numbers.
TDS Interest earned under this scheme is exempt from Indian income tax.
Operations by Power of Attorney in favour of a resident Operations in the account in terms of Power of Attorney are restricted to withdrawals for permissible local payments and for investment in the name of account holder only.
Remittance to the account holder abroad is permitted, if the PA document provides for the same
Repatriation from
NRE SB account
Principal and Interest amount are fully repatriable.
Rules applicable Credits / Debits are governed by Exchange Control Regulations
Value added services for family members Value added services for family members up to 4 members who are close relatives of NRI customer (The close relatives may be Spouse, two children/Parents). They can be NRIs or resident Indian.
The following value added services are also extended to the family members who are close relatives on registration:
a) No charges on statement of accounts. Monthly account statement will be sent through e-mail.
b) No charges for duplicate passbook.
c) Enable at product level – net banking and mobile banking.
d) International debit cards – Total limit of 125000/- with sub-limit for ATM withdrawal 50000/- and POS limit of 125000/-.
e) No charges for SMS alerts with in India and to Indian mobile numbers.
f) Free demand drafts/RTGS/NEFT up to 100000/- per month. Free outstation cheques collections to the account of close relatives upto 100000/- p.m.
g) Cash withdrawal at non base locations up to 50000/-.
h) Concessions in rate of interest on personal loans, vehicle loans and education loans up to 0.25% in addition to the existing concessions wherever applicable and waiver of processing charges. After the cumulative concession, the ROI should not be less than MCLR of the Bank.
Ques 22: Synd Pravasi Pooji SB NRE Account
Ans:
Type of Account NRE Savings Bank Account
Non Resident (External) Rupee Account ( NRE) Savings Bank (SB)
Who can open NRIs / PIOs (other than person resident in Nepal and Bhutan) (such individuals from Bangladesh and Pakistan require prior approval of RBI)
Requirements  Copy of Passport with Visa Stamping
 Photographs of account holder/s
 Signatures to be verified by Indian Embassy
 Duly filled in Application form
 Remittance should be from foreign origin
 Provide Overseas and Local address, Landline no./mobile numbers, Fax, email ID
 PAN or Form 60 in lieu of PAN
Joint Account Joint accounts with NRIs/PIOs or with other residents (if they are close relatives) on “Former” or “Survivor” basis.
Currency of the account Indian Rupees
Sources of Funding the Account a) Funds remitted from abroad in any permitted currency through banking channels.
b) Depositing cheque/draft drawn in foreign currency; or INR draft drawn on Vostro Accounts maintained by foreign bank and exchange houses with Syndicate Bank.
c) Transfer from other NRE / FCNR accounts of the same account holder or another account holder with our Bank or other Banks accompanied by a certificate from paying bank.
d) Surrender of foreign currency / foreign currency travellers’ cheques to the Bank by the account holder in person, as per RBI guidelines.
Note: Third party TCs are not permitted.
Nomination Permitted
Minimum average balance (MAB) The NRI Customer is expected to maintain MAB of 50000/- p.m. Account can be opened with zero balance and to be funded within 30 days. 100/- will be charged for non-maintenance of MAB after 30 days of opening of account.
Requirement The NRI customer is required to maintain minimum FD for 100000/- - to be maintained till the currency of the NRE SB account.
Premium offers for the NRI customer a) Welcome kit for opening the account
b) SB account can be opened and maintained with zero balance. There are no charges for non-maintenance of minimum balance in the SB account upto a period of 30 days.
c) 24/7 dedicated helpdesk for NRI customers to be implemented shortly.
d) Speedy remittance services.
e) Prepaid Forex travel cards/VISA Cards/Master Cards
f) Preferential exchange rate.
g) No charges on statement of accounts. Monthly account statement will be sent through e-mail.
h) Net Banking, Mobile banking (Indian mobile only).
i) International debit cards – Total limit of 125000/- with sub-limit for ATM withdrawal 50000/- and POS limit of 125000/-.
j) Sweep In-Sweep Out facility – is optional. Balance in excess of 50000/- will be swept out to term deposit in units of 1000/- as minimum lot, for a period of
one year exact. In case of need, the deposit will be swept in to SB account on LIFO (Last in First Out) basis in required number of units of 1000/-, without any penalty and without any interest. No loan against the amount swept out and invested in FD. It cannot be taken as security for any other facility.
k) Free demand Drafts/RTGS/NEFT upto 100000/- per month from NRE account, free cheque collections upto 100000/- and cash withdrawals at non-base locations up to 50000/-
l) Preferential allotment of lockers with maximum concession of 25% on the locker rent, subject to availability.
m) Free Safe Deposit Receipt keeping and facility to send scanned copy immediately to the customer through e-mail.
n) Facility to open NRO account with zero balance and can be funded later, i.e., within a maximum period of 30 days.
o) 100/- p.m. will be levied for non-maintenance of average balance of 50000/- in SB NRE account beyond 30 days period.
p) OTP in International mobile numbers.
TDS Interest earned under this scheme is exempt from Indian income tax.
Operations by Power of Attorney in favour of a resident Operations in the account in terms of Power of Attorney are restricted to withdrawals for permissible local payments and for investment in the name of account holder only.
Remittance to the account holder abroad is permitted, if the PA document provides for the same
Repatriation from
NRE SB account
Principal and Interest amount are fully repatriable.
Rules applicable Credits / Debits are governed by Exchange Control Regulations
Value added services for family members Value added services for family members up to 4 members who are close relatives of NRI customer (The close relatives may be Spouse, two children/Parents). They can be NRIs or resident Indian.
The following value added services are also extended to the family members who are close relatives on registration:
a) No charges on statement of accounts. Monthly account statement will be sent through e-mail.
b) No charges for duplicate passbook.
c) Enable at product level – net banking and mobile banking.
d) International debit cards – Total limit of 125000/- with sub-limit for ATM withdrawal 50000/- and POS limit of 125000/-.
e) No charges for SMS alerts with in India and to Indian mobile numbers.
f) Free demand drafts/RTGS/NEFT up to 100000/- per month. Free outstation cheques collections to the account of close relatives upto 100000/- p.m.
g) Cash withdrawal at non base locations up to 50000/-.
h) Concessions in rate of interest on personal loans, vehicle loans and education loans up to 0.25% in addition to the existing concessions wherever applicable and waiver of processing charges. After the cumulative concession, the ROI should not be less than MCLR of the Bank.
Ques 23: Types of accounts which can be maintained by an NRI / PIO in India
Ans:
  1. Non-Resident Ordinary Rupee Account (NRO Account)
  2. Non-Resident (External) Rupee Account (NRE Account)
  3. Foreign Currency Non Resident (Bank) Account – FCNR (B) Account
Ques 24: Types of accounts which can be maintained by an NRI / PIO in India
Ans:
  1. Non-Resident Ordinary Rupee Account (NRO Account)
  2. Non-Resident (External) Rupee Account (NRE Account)
  3. Foreign Currency Non Resident (Bank) Account – FCNR (B) Account
Ques 25: What are the different types of accounts which can be maintained by an NRI/PIO in India?
Ans:

If a person is NRI or PIO, she/ he can, without the permission from the Reserve Bank, open, hold and maintain the different types of accounts given below with an Authorized Dealer in India, i.e. a bank authorized to deal in foreign exchange. NRO Savings accounts can also be maintained with the Post Offices in India.

Ques 26: What are the different types of accounts which can be maintained by an NRI/PIO in India?
Ans:

If a person is NRI or PIO, she/ he can, without the permission from the Reserve Bank, open, hold and maintain the different types of accounts given below with an Authorized Dealer in India, i.e. a bank authorized to deal in foreign exchange. NRO Savings accounts can also be maintained with the Post Offices in India.

Ques 27: What are the different types of accounts which can be maintained by an NRI/PIO in India?
Ans:

If a person is NRI or PIO, she/ he can, without the permission from the Reserve Bank, open, hold and maintain the different types of accounts given below with an Authorized Dealer in India, i.e. a bank authorized to deal in foreign exchange. NRO Savings accounts can also be maintained with the Post Offices in India.

Ques 28: What are the different types of accounts which can be maintained by an NRI/PIO in India?
Ans:

If a person is NRI or PIO, she/ he can, without the permission from the Reserve Bank, open, hold and maintain the different types of accounts given below with an Authorized Dealer in India, i.e. a bank authorized to deal in foreign exchange. NRO Savings accounts can also be maintained with the Post Offices in India.

Ques 29: Can a resident individual make a rupee gift to a NRI/PIO who is a close relative of resident individual, by of crossed cheque/ electronic transfer?
Ans:

A resident individual can make a rupee gift to a NRI/PIO who is a close relative of the resident individual [relative‟ as defined in Section 2(77) of the Companies Act, 2013] by way of crossed cheque /electronic transfer. The amount should be credited to the Non-Resident (Ordinary) Rupee Account (NRO) a/c of the NRI / PIO and credit of such gift amount may be treated as an eligible credit to NRO a/c. The gift amount would be within the overall limit of USD 250,000 per financial year as permitted under the 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 made by the donor during the financial year including the gift amount have not exceeded the limit prescribed under the LRS.

Ques 30: Can a resident individual make a rupee gift to a NRI/PIO who is a close relative of resident individual, by of crossed cheque/ electronic transfer?
Ans:

A resident individual can make a rupee gift to a NRI/PIO who is a close relative of the resident individual [relative‟ as defined in Section 2(77) of the Companies Act, 2013] by way of crossed cheque /electronic transfer. The amount should be credited to the Non-Resident (Ordinary) Rupee Account (NRO) a/c of the NRI / PIO and credit of such gift amount may be treated as an eligible credit to NRO a/c. The gift amount would be within the overall limit of USD 250,000 per financial year as permitted under the 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 made by the donor during the financial year including the gift amount have not exceeded the limit prescribed under the LRS.

Ques 31: Can a resident individual make a rupee loan to a NRI/PIO who is a close relative of resident individual, by of crossed cheque/ electronic transfer?
Ans:

A resident individual is permitted to make a rupee loan to a NRI/PIO who is a close relative of the resident individual („relative‟ as defined in Section 2(77) of the Companies Act, 2013) by way of crossed cheque/ electronic transfer subject to the following conditions:
(i) The loan is free of interest and the minimum maturity of the loan is one year.
(ii) The loan amount should be within the overall LRS limit of USD 2,50,000, per financial year, available to the resident individual. It would be the responsibility of the lender to ensure that the amount of loan is within the LRS limit of USD 2,50,000 during the financial year.
(iii) The loan shall be utilised for meeting the borrower's personal requirements or for his own business purposes in India.
(iv) The loan shall not be utilised, either singly or in association with other person, for any of the activities in which investment by persons resident outside India is prohibited, namely;
a. the business of chit fund, or
b. Nidhi Company, or
c. agricultural or plantation activities or in real estate business, or construction of farmhouses, or
d. trading in Transferable Development Rights (TDRs).
Explanation: For the purpose of item (c) above, real estate business shall not include development of townships, construction of residential / commercial premises, roads or bridges.
(v) The loan amount should be credited to the NRO a/c of the NRI /PIO. Credit of such loan amount may be treated as an eligible credit to NRO a/c.
(vi) The loan amount shall not be remitted outside India.
(vii) Repayment of loan shall be made by way of inward remittances through normal banking channels or by debit to the Non-resident Ordinary (NRO)/ Non-resident External (NRE) / Foreign Currency Non-resident (FCNR) account of the borrower or out of the sale proceeds of the shares or securities or immovable property against which such loan was granted.

Ques 32: Can a resident individual make a rupee loan to a NRI/PIO who is a close relative of resident individual, by of crossed cheque/ electronic transfer?
Ans:

A resident individual is permitted to make a rupee loan to a NRI/PIO who is a close relative of the resident individual („relative‟ as defined in Section 2(77) of the Companies Act, 2013) by way of crossed cheque/ electronic transfer subject to the following conditions:
(i) The loan is free of interest and the minimum maturity of the loan is one year.
(ii) The loan amount should be within the overall LRS limit of USD 2,50,000, per financial year, available to the resident individual. It would be the responsibility of the lender to ensure that the amount of loan is within the LRS limit of USD 2,50,000 during the financial year.
(iii) The loan shall be utilised for meeting the borrower's personal requirements or for his own business purposes in India.
(iv) The loan shall not be utilised, either singly or in association with other person, for any of the activities in which investment by persons resident outside India is prohibited, namely;
a. the business of chit fund, or
b. Nidhi Company, or
c. agricultural or plantation activities or in real estate business, or construction of farmhouses, or
d. trading in Transferable Development Rights (TDRs).
Explanation: For the purpose of item (c) above, real estate business shall not include development of townships, construction of residential / commercial premises, roads or bridges.
(v) The loan amount should be credited to the NRO a/c of the NRI /PIO. Credit of such loan amount may be treated as an eligible credit to NRO a/c.
(vi) The loan amount shall not be remitted outside India.
(vii) Repayment of loan shall be made by way of inward remittances through normal banking channels or by debit to the Non-resident Ordinary (NRO)/ Non-resident External (NRE) / Foreign Currency Non-resident (FCNR) account of the borrower or out of the sale proceeds of the shares or securities or immovable property against which such loan was granted.

Ques 33: Clarification on remittance by sole proprietor under LRS.
Ans:

 In a sole proprietorship business, there is no legal distinction between the individual / owner and as such the owner of the business can remit USD up to the permissible limit under LRS. If a sole proprietorship firm intends to remit the money under LRS by debiting its current account then the eligibility of the proprietor in his individual capacity has to be reckoned. Hence, if an individual in his own capacity remits USD 250,000 in a financial year under LRS, he cannot remit another USD 250,000 in the capacity of owner of the sole proprietorship business as there is no legal distinction.

Ques 34: Clarification on remittance by sole proprietor under LRS.
Ans:

 In a sole proprietorship business, there is no legal distinction between the individual / owner and as such the owner of the business can remit USD up to the permissible limit under LRS. If a sole proprietorship firm intends to remit the money under LRS by debiting its current account then the eligibility of the proprietor in his individual capacity has to be reckoned. Hence, if an individual in his own capacity remits USD 250,000 in a financial year under LRS, he cannot remit another USD 250,000 in the capacity of owner of the sole proprietorship business as there is no legal distinction.

Ques 35: Will the expenses incurred by an LLP to sponsor the education expense of its partners who are pursuing higher studies for the benefit of the LLP will be outside the LRS limit of such individuals (partners)?
Ans:

LLP is a body corporate and has a legal entity separate from its partners. Therefore, if the LLP incurs/sponsors the education expense of its partners who are pursuing higher studies for the benefit of the LLP, then the same shall be outside the LRS limit of the individual partners and would instead be deemed as residual current account transaction undertaken by the LLP without any limits.

Ques 36: Will the expenses incurred by an LLP to sponsor the education expense of its partners who are pursuing higher studies for the benefit of the LLP will be outside the LRS limit of such individuals (partners)?
Ans:

LLP is a body corporate and has a legal entity separate from its partners. Therefore, if the LLP incurs/sponsors the education expense of its partners who are pursuing higher studies for the benefit of the LLP, then the same shall be outside the LRS limit of the individual partners and would instead be deemed as residual current account transaction undertaken by the LLP without any limits.

Ques 37: Whether documents viz 15 CA, 15 CB have to be taken in all outward remittance cases including remittances for maintenance etc.?
Ans:

In terms of A. P. (DIR Series) circular No. 151 dated June 30, 2014, Reserve Bank of India will not issue any instructions under the FEMA, regarding the procedure to be followed in respect of deduction of tax at source while allowing remittances to the non-residents. It shall be mandatory on the part of ADs to comply with the requirement of the tax laws, as applicable.

Ques 38: Whether documents viz 15 CA, 15 CB have to be taken in all outward remittance cases including remittances for maintenance etc.?
Ans:

In terms of A. P. (DIR Series) circular No. 151 dated June 30, 2014, Reserve Bank of India will not issue any instructions under the FEMA, regarding the procedure to be followed in respect of deduction of tax at source while allowing remittances to the non-residents. It shall be mandatory on the part of ADs to comply with the requirement of the tax laws, as applicable.

Ques 39: Are there any restrictions on the frequency of the remittance?
Ans:

There are no restrictions on the frequency of remittances under LRS. However, the total amount of foreign exchange purchased from or remitted through, all sources in India during a financial year should be within the cumulative limit of USD 2,50,000.
Once a remittance is made for an amount up to USD 2,50,000 during the financial year, a resident individual would not be eligible to make any further remittances under this scheme, even if the proceeds of the investments have been brought back into the country.

Ques 40: Are there any restrictions on the frequency of the remittance?
Ans:

There are no restrictions on the frequency of remittances under LRS. However, the total amount of foreign exchange purchased from or remitted through, all sources in India during a financial year should be within the cumulative limit of USD 2,50,000.
Once a remittance is made for an amount up to USD 2,50,000 during the financial year, a resident individual would not be eligible to make any further remittances under this scheme, even if the proceeds of the investments have been brought back into the country.

Ques 41: Can an Offshore Banking Unit (OBU) in India be treated on par with a branch of the bank outside India for the purpose of opening of foreign currency accounts by residents under the Scheme?
Ans:

No. For the purpose of the Scheme, an OBU in India is not treated as an overseas branch of a bank in India.

Ques 42: Can an Offshore Banking Unit (OBU) in India be treated on par with a branch of the bank outside India for the purpose of opening of foreign currency accounts by residents under the Scheme?
Ans:

No. For the purpose of the Scheme, an OBU in India is not treated as an overseas branch of a bank in India.

Ques 43: Can bankers open foreign currency accounts in India for residents under the Scheme?
Ans:

No. Banks in India cannot open foreign currency accounts in India for residents under the Scheme.

Ques 44: Can bankers open foreign currency accounts in India for residents under the Scheme?
Ans:

No. Banks in India cannot open foreign currency accounts in India for residents under the Scheme.

Ques 45: .Are there any restrictions on the kind/ quality of debt or equity instruments an individual can invest in?
Ans:

No ratings or guidelines have been prescribed under the Liberalised Remittance Scheme. However, the individual investor is expected to exercise due diligence while taking a decision regarding the investments under the Scheme.

Ques 46: .Are there any restrictions on the kind/ quality of debt or equity instruments an individual can invest in?
Ans:

No ratings or guidelines have been prescribed under the Liberalised Remittance Scheme. However, the individual investor is expected to exercise due diligence while taking a decision regarding the investments under the Scheme.

Ques 47: Can remittances be made to acquire Joint Ventures abroad?
Ans:

 With effect from August 05, 2013, this Scheme, can be used by Resident individuals to set up Joint Ventures (JV)/ Wholly Owned Subsidiaries (WOS) outside India for bona fides business activities within the limit of USD 250,000 subject to the terms & conditions stipulated in FEMA Notification No.263.
 

Ques 48: Can remittances be made to acquire Joint Ventures abroad?
Ans:

 With effect from August 05, 2013, this Scheme, can be used by Resident individuals to set up Joint Ventures (JV)/ Wholly Owned Subsidiaries (WOS) outside India for bona fides business activities within the limit of USD 250,000 subject to the terms & conditions stipulated in FEMA Notification No.263.
 

Ques 49: Can resident individuals make remittances under LRS for investments in immovable properties abroad which were acquired under installment basis?
Ans:

 Resident individuals are permitted to make remittances for acquiring immovable property within the annual limit of USD 250,000
 

Ques 50: Can resident individuals make remittances under LRS for investments in immovable properties abroad which were acquired under installment basis?
Ans:

 Resident individuals are permitted to make remittances for acquiring immovable property within the annual limit of USD 250,000
 

Ques 51: Are remittances required to be made only in US Dollars?
Ans:

The remittances can be made in any freely convertible foreign currency equivalent to USD 250,000 in a financial year.

Ques 52: Are remittances required to be made only in US Dollars?
Ans:

The remittances can be made in any freely convertible foreign currency equivalent to USD 250,000 in a financial year.

Ques 53: Can an individual, who has repatriated the amount remitted during the financial year, avail of the facility once again?
Ans:

 Once a remittance is made for an amount up to USD 250,000 during the financial year, he would not be eligible to make any further remittances under this scheme, even if the proceeds of the investments have been brought back into the country.

Ques 54: Can an individual, who has repatriated the amount remitted during the financial year, avail of the facility once again?
Ans:

 Once a remittance is made for an amount up to USD 250,000 during the financial year, he would not be eligible to make any further remittances under this scheme, even if the proceeds of the investments have been brought back into the country.

Ques 55: What are the requirements to be complied with by the remitter?
Ans:

The individual will have to designate a branch of an AD through which all the remittances under the Scheme will be made. The applicants should have maintained the bank account with the bank for a minimum period of one year prior to the remittance. If the applicant seeking to make the remittance is a new customer of the bank, Authorised Dealers should carry out due diligence on the opening, operation and maintenance of the account. Further, the AD should obtain bank statement for the previous year from the applicant to satisfy themselves regarding the source of funds. If such a bank statement is not available, copies of the latest Income Tax Assessment Order or Return filed by the applicant may be obtained. He has to furnish an application-cum-declaration in the specified format regarding the purpose of the remittance and declare that the funds belong to him and will not be used for the purposes prohibited or regulated under the Scheme. . It is mandatory to have PAN number to make remittances under the Scheme

Ques 56: What are the requirements to be complied with by the remitter?
Ans:

The individual will have to designate a branch of an AD through which all the remittances under the Scheme will be made. The applicants should have maintained the bank account with the bank for a minimum period of one year prior to the remittance. If the applicant seeking to make the remittance is a new customer of the bank, Authorised Dealers should carry out due diligence on the opening, operation and maintenance of the account. Further, the AD should obtain bank statement for the previous year from the applicant to satisfy themselves regarding the source of funds. If such a bank statement is not available, copies of the latest Income Tax Assessment Order or Return filed by the applicant may be obtained. He has to furnish an application-cum-declaration in the specified format regarding the purpose of the remittance and declare that the funds belong to him and will not be used for the purposes prohibited or regulated under the Scheme. . It is mandatory to have PAN number to make remittances under the Scheme

Ques 57: Are there any restrictions on the frequency of the remittance?
Ans:

There is no restriction on the frequency. However, the total amount of foreign exchange purchased from or remitted through, all sources in India during a financial year should be within the cumulative limit of USD 250,000

Ques 58: Are there any restrictions on the frequency of the remittance?
Ans:

There is no restriction on the frequency. However, the total amount of foreign exchange purchased from or remitted through, all sources in India during a financial year should be within the cumulative limit of USD 250,000

Ques 59: In case a resident individual requests for an outward remittance by way of issuance of a demand draft (either in his own name or in the name of the beneficiary with whom he intends to putting through the permissible transactions) at the time of his privat
Ans:

Such outward remittance in the form of a DD can be effected against the declaration by the resident individual in the format prescribed under the Scheme.

Ques 60: In case a resident individual requests for an outward remittance by way of issuance of a demand draft (either in his own name or in the name of the beneficiary with whom he intends to putting through the permissible transactions) at the time of his privat
Ans:

Such outward remittance in the form of a DD can be effected against the declaration by the resident individual in the format prescribed under the Scheme.

Ques 61: Is it mandatory for resident individuals to have a PAN number for sending outward remittances under the Scheme?
Ans:

 It is mandatory to have PAN number to make remittances under the Scheme.

Ques 62: Is it mandatory for resident individuals to have a PAN number for sending outward remittances under the Scheme?
Ans:

 It is mandatory to have PAN number to make remittances under the Scheme.

Ques 63: Can an individual, who has availed of a loan abroad while as a non-resident Indian repay the same on return to India, under this Scheme as a resident?
Ans:

This is permissible.

Ques 64: Can an individual, who has availed of a loan abroad while as a non-resident Indian repay the same on return to India, under this Scheme as a resident?
Ans:

This is permissible.

Ques 65: Can a resident individual invest in units of Mutual Funds, Venture Funds, unrated debt securities, promissory notes, etc., under this scheme?
Ans:

 A resident individual can invest in units of Mutual Funds, Venture Funds, unrated debt securities, promissory notes, etc. under this Scheme. Further, the resident can invest in such securities through the bank account opened abroad for the purpose under the Scheme

Ques 66: Can a resident individual invest in units of Mutual Funds, Venture Funds, unrated debt securities, promissory notes, etc., under this scheme?
Ans:

 A resident individual can invest in units of Mutual Funds, Venture Funds, unrated debt securities, promissory notes, etc. under this Scheme. Further, the resident can invest in such securities through the bank account opened abroad for the purpose under the Scheme

Ques 67: Is this scheme in addition to acquisition of ESOPs linked to ADR/GDR (i.e USD 50,000/- for a block of 5 calendar years)?
Ans:

 The remittance under the Scheme is in addition to acquisition of ESOPs linked to ADR/ GDR

Ques 68: Is this scheme in addition to acquisition of ESOPs linked to ADR/GDR (i.e USD 50,000/- for a block of 5 calendar years)?
Ans:

 The remittance under the Scheme is in addition to acquisition of ESOPs linked to ADR/ GDR

Ques 69: Can remittance be made under this Scheme for acquisition of ESOPs?
Ans:

The Scheme can also be used for remittance of funds for acquiring ESOPs.

Ques 70: Can remittance be made under this Scheme for acquisition of ESOPs?
Ans:

The Scheme can also be used for remittance of funds for acquiring ESOPs.

Ques 71: Is the AD required to check the permissibility of remittances based on the nature of transaction or can it allow the remittance based on remitter‟s declaration?
Ans:

AD will be guided by the nature of transaction as declared by the remitter and will certify that the remittance is in conformity with the instructions issued by the Reserve Bank of India, in this regard from time to time.

Ques 72: Is the AD required to check the permissibility of remittances based on the nature of transaction or can it allow the remittance based on remitter‟s declaration?
Ans:

AD will be guided by the nature of transaction as declared by the remitter and will certify that the remittance is in conformity with the instructions issued by the Reserve Bank of India, in this regard from time to time.

Ques 73: Can remittances under the facility be consolidated in respect of family members?
Ans:

Remittances under the facility can be consolidated in respect of close family members subject to the individual family members complying with the terms and conditions of the Scheme. However, clubbing is not permitted by other family members for capital account transactions such as opening a bank account/investment/purchase of property, if they are not the co-owners/co-partners of the investment/property/overseas bank account. Further, a resident cannot gift to another resident, in foreign currency, for the credit of the latter‟s foreign currency account held abroad under LRS

Ques 74: Can remittances under the facility be consolidated in respect of family members?
Ans:

Remittances under the facility can be consolidated in respect of close family members subject to the individual family members complying with the terms and conditions of the Scheme. However, clubbing is not permitted by other family members for capital account transactions such as opening a bank account/investment/purchase of property, if they are not the co-owners/co-partners of the investment/property/overseas bank account. Further, a resident cannot gift to another resident, in foreign currency, for the credit of the latter‟s foreign currency account held abroad under LRS

Ques 75: Are remittances under the Scheme on gross basis or net basis (net of repatriation from abroad)?
Ans:

Remittance under this scheme is on a gross basis

Ques 76: Are remittances under the Scheme on gross basis or net basis (net of repatriation from abroad)?
Ans:

Remittance under this scheme is on a gross basis

Ques 77: Are resident individuals under this Scheme required to repatriate back to India the accrued interest/ dividend on deposits/ investments abroad, over and above the principal amount?
Ans:

No, the investor can retain and reinvest the income earned from portfolio investments made under the Scheme.However, a resident individual who has made overseas direct investment in the equity shares and compulsorily convertible preference shares of a Joint Venture or Wholly Owned Subsidiary outside India, within the LRS limit, then he/she shall have to comply with the terms and conditions as prescribed under [Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations 2004 as amended from time to time] Notification No. 263/ RB-2013 dated August 5, 2013.

Ques 78: Are resident individuals under this Scheme required to repatriate back to India the accrued interest/ dividend on deposits/ investments abroad, over and above the principal amount?
Ans:

No, the investor can retain and reinvest the income earned from portfolio investments made under the Scheme.However, a resident individual who has made overseas direct investment in the equity shares and compulsorily convertible preference shares of a Joint Venture or Wholly Owned Subsidiary outside India, within the LRS limit, then he/she shall have to comply with the terms and conditions as prescribed under [Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations 2004 as amended from time to time] Notification No. 263/ RB-2013 dated August 5, 2013.

Ques 79: Whether LRS facility is in addition to existing facilities detailed in Schedule III under remittances?
Ans:

Individuals can avail of foreign exchange facility for the following purposes within the limit of USD 2,50,000 only. Any additional remittance in excess of the said limit for the following purposes shall require prior approval of the Reserve Bank of India. I. Facilities for individuals— i. i. Private visits to any country (except Nepal and Bhutan). ii. ii. Gift or donation. iii. iii. Going abroad for employment. iv. iv.Emigration. v. v..Maintenance of close relatives abroad. vi. vi.Travel for business, or attending a conference or specialised training or for meeting expenses for meeting medical expenses, or check-up abroad, or for accompanying as attendant to a patient going abroad for medical treatment/ check-up. vii. vii.Expenses in connection with medical treatment abroad. viii. viii.Studies abroad. ix. ix.Any other current account transaction Provided that for the purposes mentioned at item numbers (iv), (vii) and (viii), the individual may avail of exchange facility for an amount in excess of the limit prescribed under the Liberalised Remittance Scheme as provided in regulation 4 to FEMA Notification 1/2000-RB, dated the 3rd May, 2000 (here in after referred to as the said Liberalised Remittance Scheme) if it is so required by a country of emigration, medical institute offering treatment or the university, respectively: Provided further that if an individual remits any amount under the said Liberalised Remittance Scheme in a financial year, then the applicable limit for such individual would be reduced from USD 250,000 (US Dollars Two Hundred and Fifty Thousand Only) by the amount so remitted: provided also that for a person who is resident but not permanently resident in India and – a. a.Is a citizen of a foreign State other than Pakistan; or b. b.Is a citizen of India, who is on deputation to the office or branch of a foreign company or subsidiary or joint venture in India of such foreign company,may make remittance up to his net salary (after deduction of taxes, contribution to provident fund and other deductions). Explanation: For the purpose of this item, a person resident in India on account of his employment or deputation of a specified duration (irrespective of length thereof) or for a specific job or assignments, the duration of which does not exceed three years, is a resident but not permanently resident: provided also that a person other than an individual may also avail of foreign exchange facility, mutatis mutandis, within the limit prescribed under the said Liberalised Remittance Scheme for the purposes mentioned herein above. II.Facilities for persons other than individual - The following remittances by persons other than individuals shall require prior approval of the Reserve Bank of India. (i) Donations exceeding one per cent. of their foreign exchange earnings during the previous three financial years or USD 5,000,000, whichever is less, for- a. a.Creation of Chairs in reputed educational institutes, b. b.Contribution to funds (not being an investment fund) promoted by educational institutes; and c. c.Contribution to a technical institution or body or association in the field of activity of the donor Company. (ii) Commission, per transaction, to agents abroad for sale of residential flats or commercial plots in India exceeding USD 25,000 or five percent of the inward remittance whichever is more. (iii) Remittances exceeding USD 10,000,000 per project for any consultancy services in respect of infrastructure projects and USD 1,000,000 per project, for other consultancy services procured from outside India. Explanation:—For the purposes of this sub-paragraph, the expression “infrastructure’ shall mean as defined in explanation to para 1(iv)(A)(a) of Schedule I of FEMA Notification 3/2000-RB, dated the May 3, 2000. (iv) Remittances exceeding five per cent of investment brought into India or USD 100,000 whichever is higher, by an entity in India by way of reimbursement of pre-incorporation expenses.”

Ques 80: Whether LRS facility is in addition to existing facilities detailed in Schedule III under remittances?
Ans:

Individuals can avail of foreign exchange facility for the following purposes within the limit of USD 2,50,000 only. Any additional remittance in excess of the said limit for the following purposes shall require prior approval of the Reserve Bank of India. I. Facilities for individuals— i. i. Private visits to any country (except Nepal and Bhutan). ii. ii. Gift or donation. iii. iii. Going abroad for employment. iv. iv.Emigration. v. v..Maintenance of close relatives abroad. vi. vi.Travel for business, or attending a conference or specialised training or for meeting expenses for meeting medical expenses, or check-up abroad, or for accompanying as attendant to a patient going abroad for medical treatment/ check-up. vii. vii.Expenses in connection with medical treatment abroad. viii. viii.Studies abroad. ix. ix.Any other current account transaction Provided that for the purposes mentioned at item numbers (iv), (vii) and (viii), the individual may avail of exchange facility for an amount in excess of the limit prescribed under the Liberalised Remittance Scheme as provided in regulation 4 to FEMA Notification 1/2000-RB, dated the 3rd May, 2000 (here in after referred to as the said Liberalised Remittance Scheme) if it is so required by a country of emigration, medical institute offering treatment or the university, respectively: Provided further that if an individual remits any amount under the said Liberalised Remittance Scheme in a financial year, then the applicable limit for such individual would be reduced from USD 250,000 (US Dollars Two Hundred and Fifty Thousand Only) by the amount so remitted: provided also that for a person who is resident but not permanently resident in India and – a. a.Is a citizen of a foreign State other than Pakistan; or b. b.Is a citizen of India, who is on deputation to the office or branch of a foreign company or subsidiary or joint venture in India of such foreign company,may make remittance up to his net salary (after deduction of taxes, contribution to provident fund and other deductions). Explanation: For the purpose of this item, a person resident in India on account of his employment or deputation of a specified duration (irrespective of length thereof) or for a specific job or assignments, the duration of which does not exceed three years, is a resident but not permanently resident: provided also that a person other than an individual may also avail of foreign exchange facility, mutatis mutandis, within the limit prescribed under the said Liberalised Remittance Scheme for the purposes mentioned herein above. II.Facilities for persons other than individual - The following remittances by persons other than individuals shall require prior approval of the Reserve Bank of India. (i) Donations exceeding one per cent. of their foreign exchange earnings during the previous three financial years or USD 5,000,000, whichever is less, for- a. a.Creation of Chairs in reputed educational institutes, b. b.Contribution to funds (not being an investment fund) promoted by educational institutes; and c. c.Contribution to a technical institution or body or association in the field of activity of the donor Company. (ii) Commission, per transaction, to agents abroad for sale of residential flats or commercial plots in India exceeding USD 25,000 or five percent of the inward remittance whichever is more. (iii) Remittances exceeding USD 10,000,000 per project for any consultancy services in respect of infrastructure projects and USD 1,000,000 per project, for other consultancy services procured from outside India. Explanation:—For the purposes of this sub-paragraph, the expression “infrastructure’ shall mean as defined in explanation to para 1(iv)(A)(a) of Schedule I of FEMA Notification 3/2000-RB, dated the May 3, 2000. (iv) Remittances exceeding five per cent of investment brought into India or USD 100,000 whichever is higher, by an entity in India by way of reimbursement of pre-incorporation expenses.”

Ques 81: What are the prohibited items under the Scheme?
Ans:

The remittance facility under the Scheme is not available for the following:

 Remittance for any purpose specifically prohibited under Schedule-I (like purchase of lottery tickets/sweep stakes, proscribed magazines, etc.) or any item restricted under Schedule II of Foreign Exchange Management (Current Account Transactions) Rules, 2000;

Remittance from India for margins or margin calls to overseas exchanges / overseas counterparty;

 Remittances for purchase of FCCBs issued by Indian companies in the overseas secondary market;

 Remittance for trading in foreign exchange abroad;
Capital account remittances, directly or indirectly, to countries identified by the Financial Action Task Force (FATF) as “non- cooperative countries and territories”, from time to time.

 Remittances directly or indirectly to those individuals and entities identified as posing significant risk of committing acts of terrorism as advised separately by the Reserve Bank to the banks.

Ques 82: What are the prohibited items under the Scheme?
Ans:

The remittance facility under the Scheme is not available for the following:

 Remittance for any purpose specifically prohibited under Schedule-I (like purchase of lottery tickets/sweep stakes, proscribed magazines, etc.) or any item restricted under Schedule II of Foreign Exchange Management (Current Account Transactions) Rules, 2000;

Remittance from India for margins or margin calls to overseas exchanges / overseas counterparty;

 Remittances for purchase of FCCBs issued by Indian companies in the overseas secondary market;

 Remittance for trading in foreign exchange abroad;
Capital account remittances, directly or indirectly, to countries identified by the Financial Action Task Force (FATF) as “non- cooperative countries and territories”, from time to time.

 Remittances directly or indirectly to those individuals and entities identified as posing significant risk of committing acts of terrorism as advised separately by the Reserve Bank to the banks.

Ques 83: Please illustrate the capital account transactions permitted under the scheme.
Ans:

Under the Scheme, resident individuals can acquire and hold shares or debt instruments or any other assets including property outside India, without prior approval of the Reserve Bank. Individuals can also open, maintain and hold foreign currency accounts with banks outside India for carrying out transactions permitted under the Scheme

The permissible capital account transactions by an individual under LRS are:

1.Opening of foreign currency account abroad with a bank;

2.Purchase of property abroad;

3.Making investments abroad- acquisition and holding shares of both listed and unlisted overseas company or debt instruments; 5acquisition of qualification shares of an overseas company for holding the post of Director; acquisition of shares of a foreign company towards professional services rendered or in lieu of Director‟s remuneration; investment in units of Mutual Funds, Venture Capital Funds, unrated debt securities, promissory notes.

4.Setting up Wholly Owned Subsidiaries and Joint Ventures (with effect from August 05, 2013) outside India for bonafide business subject to the terms & conditions stipulated in Notification No FEMA.263/ RB-2013 dated March 5, 2013 .

5.Etending loans including loans in Indian Rupees to Non-resident Indians (NRIs) who are relatives as defined in Companies Act, 1956.

Ques 84: Please illustrate the capital account transactions permitted under the scheme.
Ans:

Under the Scheme, resident individuals can acquire and hold shares or debt instruments or any other assets including property outside India, without prior approval of the Reserve Bank. Individuals can also open, maintain and hold foreign currency accounts with banks outside India for carrying out transactions permitted under the Scheme

The permissible capital account transactions by an individual under LRS are:

1.Opening of foreign currency account abroad with a bank;

2.Purchase of property abroad;

3.Making investments abroad- acquisition and holding shares of both listed and unlisted overseas company or debt instruments; 5acquisition of qualification shares of an overseas company for holding the post of Director; acquisition of shares of a foreign company towards professional services rendered or in lieu of Director‟s remuneration; investment in units of Mutual Funds, Venture Capital Funds, unrated debt securities, promissory notes.

4.Setting up Wholly Owned Subsidiaries and Joint Ventures (with effect from August 05, 2013) outside India for bonafide business subject to the terms & conditions stipulated in Notification No FEMA.263/ RB-2013 dated March 5, 2013 .

5.Etending loans including loans in Indian Rupees to Non-resident Indians (NRIs) who are relatives as defined in Companies Act, 1956.

Ques 85: What is the Liberalized Remittance Scheme (LRS) of USD 250,000?
Ans:

Under the Liberalized Remittance Scheme, all resident individuals, including minors, are allowed to freely remit up to USD 2,50,000 per financial year (April – March) for any permissible current or capital account transaction or a combination of both.
 

Ques 86: What is the Liberalized Remittance Scheme (LRS) of USD 250,000?
Ans:

Under the Liberalized Remittance Scheme, all resident individuals, including minors, are allowed to freely remit up to USD 2,50,000 per financial year (April – March) for any permissible current or capital account transaction or a combination of both.
 

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