The Reserve Bank of India on Thursday further liberalised the foreign exchange facilities for individuals under the Foreign Exchange Management Act, (FEMA), 1999.
Individual residents in India are now permitted to include non-resident close relative(s) as joint holder(s) in their resident bank accounts, namely, savings (SB), Exporter Earners' Foreign Currency (EEFC) and Residents' Foreign Currency (RFC) accounts, on ‘former or survivor' basis.
Non-resident Indians (NRIs)/Person of Indian Origin (PIO), are now permitted to open Non-resident (External) (NRE) Rupee Account scheme/Foreign Currency (Non-Resident) (FCNR) Account (Banks) scheme with their resident close relative(s) as joint holder(s) on ‘former or survivor' basis.
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A person resident in India can now give to a person resident outside India, by way of gift, any security/shares/debentures of value up to $50,000 in value per financial year subject to certain conditions. Earlier, a person resident in India could give to a person resident outside India, by way of gift, any security/shares/debentures of value up to $25,000 per calendar year.
Sale proceeds of foreign direct investment (FDI) can be credited to Non-Resident (External) Rupee (NRE) Account scheme/Foreign Currency (Non-Resident) Account FCNR (Banks) scheme, provided the original acquisition was by way of inward remittance or funds held in their NRE/FCNR (B) accounts.
Resident individuals are now permitted to make rupee gifts within the overall limit of $200,000 per financial year as permitted under the liberalised remittance scheme (LRS) to an NRI/PIO who is a close relative by way of crossed cheque/electronic transfer to the Non-Resident (Ordinary) Rupee Account (NRO) of the NRI/PIO.
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Similarly, resident individuals are now permitted to lend in rupees within the overall limit under the liberalised remittance scheme of $200,000 per financial year to a NRI/ PIO close relative by way of crossed cheque/electronic transfer, subject to certain conditions.
Resident individuals are now granted general permission to repay loans availed of in rupee from banks in India by their NRI close relatives. Earlier, repayment of loans by close relative in respect of rupee loan availed of by NRIs was restricted only to housing loans. Residents will now be allowed to bear the medical expenses of visiting NRIs/PIOs' close relatives. The RBI said that these permissions were given based on the recommendations of the committee set up under the Chairmanship of K. J. Udeshi, which submitted its report in early August.