RBI/2013-2014/437
A.P. (DIR Series) Circular No. 87
January 9, 2014
To
All Banks Authorised to deal in Foreign Exchange
Madam/Sir,
Resident Bank account maintained by residents in India
Joint holder – liberalization
Attention of Authorised Dealer (AD) banks is invited to
A.P.(DIR Series)
Circular No.12 dated September 15, 2011 in terms of which individuals resident
in India were permitted to include non-resident close relative(s) (relatives as
defined in Section 6 of the Companies Act, 1956) as a joint holder(s) in their
resident savings bank accounts on “former or survivor” basis. Such non-resident
Indian close relatives are however not eligible to operate the account during
the life time of the resident account holder in terms of said instructions.
- Reserve Bank has received representations that for operational convenience
the Non-Resident Indians (NRIs), as defined in Regulation 2(vi) of FEMA
Notification No.5 dated May 3, 2000, may be permitted to operate such accounts
on “Either or Survivor” basis. Accordingly, on a review, it has been decided
that AD banks may include an NRI close relative (relatives as defined in Section
6 of the Companies Act, 1956) in existing / new resident bank accounts as joint
holder with the resident account holder on “Either or Survivor” basis subject to
the following conditions:
- Such account will be treated as resident bank account for all purposes and all
regulations applicable to a resident bank account shall be applicable.
- Cheques, instruments, remittances, cash, card or any other proceeds belonging to
the NRI close relative shall not be eligible for credit to this account.
- The NRI close relative shall operate such account only for and on behalf of the
resident for domestic payment and not for creating any beneficial interest for
himself.
- Where the NRI close relative becomes a joint holder with more than one resident
in such account, such NRI close relative should be the close relative of all the
resident bank account holders.
- Where due to any eventuality, the non-resident account holder becomes the
survivor of such an account, it shall be categorized as Non-Resident Ordinary
Rupee (NRO) account as per the extant regulations.
- Onus will be on the non-resident account holder to keep AD bank informed to get
the account categorized as NRO account and all such regulations as applicable to
NRO account shall be applicable.
- The above joint account holder facility may be extended to all types of resident
accounts including savings bank account.
- While extending this facility the AD bank should satisfy itself about the
actual need for such a facility and also obtain the following declaration duly
signed by the non-resident account holder:
“I am the joint account holder of SB/FD/RD/Current Account bearing No ……. which
stands in my name and in the name of Shri/Smt. ……….. who is my ………. (state
relationship). I hereby undertake that I shall not use the proceeds lying in the
above account for any transaction in contravention of the provisions of the
Foreign Exchange Management Act (FEMA) 1999, Rules/Regulations made thereunder
and the related circulars/instructions issued by the Reserve Bank from time to
time. I further undertake that if any such transaction is put through the said
account in contravention of the FEMA, 1999 or Rules/Regulations made thereunder,
I shall be held responsible for the same. I shall intimate my bank in the event
of any change in my Non-resident / Resident status.”
- Authorised Dealer Category – I banks may bring the contents of this circular
to the notice of their constituents and customers concerned.
- The directions contained in this circular have been issued under Section
10(4) and Section 11(1) of the FEMA, 1999 (42 of 1999) and are without prejudice
to permissions/approvals, if any, required under any other law.
Yours faithfully,
(Rudra Narayan Kar)
Chief General Manager In-Charge