NRIs, resident Indians can open joint accounts

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Mumbai: The Reserve Bank has allowed Non-Resident Indians (NRIs) to hold joint accounts with Indian residents. The RBI is liberalising these foreign exchange rules to 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.

The central bank has taken such steps based on the recommendations of the committee constituted to review facilities available under FEMA.

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.