RBI/2011-12/174
A.P. (DIR Series) Circular No. 13
September 15, 2011
To
All Banks Authorised to Deal in Foreign Exchange
Madam / Sir,
NRIs/PIOs holding NRE/ FCNR(B) accounts jointly
with Indian resident close relative - liberalisation
Attention of the Authorised Dealer (AD) banks is invited to Schedules 1 and 2
of
FEMA Notification No. 5/2000-RB dated May 3, 2000 viz. Foreign Exchange
Management (Deposit) Regulations, 2000, as amended from time to time, in terms
of which Non-Resident (External) Rupee Account Scheme [NRE] and Foreign Currency
(Non-Resident) Account (Banks) Scheme [FCNR(B)], respectively are operated. In
terms of the extant provisions contained in para 9(a) of Schedule-1 and Para
11(1) of Schedule-2 of the Notification ibid, NRIs / PIOs are not permitted to
open NRE/FCNR (B) accounts jointly with a resident.
- The Committee to review the facilities for individuals under the
Foreign Exchange Management Act, 1999 has in its Report recommended that
NRIs may be permitted to open joint FCNR(B) /NRE account with a resident
close relative (means relative as defined in the section 6 of the Companies
Act, 1956).
- On a review, it has been decided that Non-Resident Indian (NRI), as
defined in FEMA Notification No. 5, ibid, may be permitted to open NRE /
FCNR(B) account with their resident close relative (relative as defined in
Section 6 of the Companies Act, 1956) on ‘former or survivor’ basis. The
resident close relative shall be eligible to operate the account as a Power
of Attorney holder in accordance with extant instructions during the life
time of the NRI/ PIO account holder.
- AD banks may bring the contents of this circular to the notice of their
account holders concerned.
- The necessary amendments to Foreign Exchange Management (Deposit)
Regulations, 2000 contained in Notification No. FEMA.5/2000-RB dated 3rd May
2000, are being issued separately.
- The directions contained in this circular have been issued under Sections
10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999)
and are without prejudice to permissions/approvals, if any, required under
any other law.
Yours faithfully,
(Meena Hemchandra)
Chief General Manager In-Charge