New Additions for NRIs

NRSR Account **Discontinued w.e.f. April 1'2002

Facility to open Non-Resident(Special) Rupee Accounts with banks in India

NRIs/PIOs presently have the facility of maintaining bank accounts and undertaking financial transactions in India subject to certain exchange control regulations. In order to simplify the procedures and to provide greater freedom to NRIs/PIOs for putting through financial transactions in India, they will be permitted to open bank accounts in India which will be at par with rupee accounts maintained by residents.

They will now be permitted to open Non-Resident (Special) Rupee Accounts with banks in India which will have the same facilities and restrictions as are applicable rupee accounts maintained in India by residents in regard to repatriation of funds held in these accounts and/or income/interest earned on them.

The procedure for opening such accounts will be the same as in the case of domestic accounts of resident individuals.

This scheme will become effective from April 15, 1999. The existing facilities for NRIs/PIOs to maintain and operate Non-Resident (Ordinary) i.e., NRO account, Non-Resident (External) i.e. NRE account and Foreign Currency Non-Resident, i.e., FCNR account will also continue. The repatriation facilities available under these accounts will continue as before.

FEATURES

  1. Non Resident individuals of Indian nationality/having Indian origin can open NRSR accounts.
  2. The depositors have to voluntarily undertake not to seek repatriation of funds held in such accounts.
  3. NRSR Accounts are similar to NRO accounts, the major difference being that procedures applicable to operation of these accounts are simplified.
  4. NRSR accounts can be opened in the form of current, savings or term deposits in Indian rupees.
  5. NRSR accounts of Non residents can be held jointly with residents.
  6. Balances held in NRSR accounts are not eligible for remittances abroad.
  7. The amount and the interest earned thereon are not exempted from Indian Income Tax.

The Reserve Bank of India (RBI) has introduced a new account for expatriate Indians. The account--non-resident (special) rupee (NRSR) account -- will have the same facilities and restrictions in regard to repatriatiion of funds as are currently applicable to rupee accounts maintained by Indian citizens.

This, in effect, puts NRIs/persons of Indian origin (PIO) on a par with resident Indians. The new account seeks to simplify NRI transactions and is yet another attempt to woo the non-resident Indians after the phenomenal success of the Resurgent India Bonds which had raked in $4.2 billion in August 1998.

In order to facilitate various other transactions by NRIs/PIOs, the RBI has granted general permissions to resident individuals, partners/proprietorship concerns to avail of interest-bearing rupee loans from NRIs/PIO out of funds remitted by them from abrader out of funds held in their bank accounts on non-repatriation basis. This is, however, subject to certain conditions-- one of them being that the rate of interest on such loans should not exceed bank rate plus two percentage points.

An Reserve Bank release said that it will grant general permission to NRIs/PIOs/OCBs to invest in government securities and treasury bills. It has granted permission to them to invest in shares and debentures under the portfolio scheme.

The central bank said that the procedure for opening the NRSR account will be the same as in the case of domestic accounts of resident individuals. "The scheme will become effective from April 15, 1999. The existing facilities for NRIs/PIOs to maintain and operate non resident-ordinary (NRO), non resident-external (NRE) and foreign currency non resident account (FCNR) will continue. The repatriation facilities available under these accounts will continue," the release said.

PIO Card

Persons of Indian Origin (PIO) - CARD SCHEME

The Government has announced the launching of a People of Indian Origin Card, which will allow visa free entry to Indian origin people living abroad and give them all the rights enjoyed by Non-Resident Indians (NRIs) including purchase of non-agricultural land. 15 million people of Indian origin living abroad will benefit from the Card. The fee is US $ 1,000 and is valid for 20 years. However, it would not be issued to people of Indian origin living in Pakistan and Bangladesh. It does not give voting rights to the holders of the Card. It is eligible for the Indians who hold a foreign passport living abroad till the fourth generation. The PIO Card holder would be exempt from registration if his stay in India does not exceed 180 days. However, if the stay exceeds 180 days, the PIO Card holder will have to register within 30 days of the expiry of 180 days with the concerned Foreigners Registration Officer at district headquarters. The right to buy property would not be valid to Jammu & Kashmir. The PIO Card holder would be able to admit their children to educational institution in India under the NRI category. These include the IITs and Indian institutes of Management. They can also benefit from housing schemes of the Life Insurance Corporation, State Governments and other Government agencies.

THE PRESS RELEASE AND GAZETTE NOTIFICATION ON PIO CARD FOLLOWS: -

Understanding the sentiments of persons of Indian origin to be closer to their original country and to reinforce their emotional bonds, as well as respecting their desire to participate in the development of the resolve to frame a special scheme. This resolve was translated in the first Budget Speech of FM: -

"Government have decided to draw up a scheme for issuance of a Persons of Indian Origin (PIO) Card for those living abroad and having foreign passports. The PIO Card, which would be extended to Persons of Indian Origin settled in countries to be specified by Government would besides introducing a visa free regime, also confer some special economic, educational, financial and cultural benefits. The details are being worked out".

The Government has today launched a comprehensive Scheme for the Persons of Indian Origin - called the "PIO Card Scheme". Under this scheme, Persons of Indian Origin up to the fourth generation (great grand parents) settled throughout the world, except for a few specified countries, would be eligible. The Card would be issued to eligible applicants through the concerned Indian Embassies/ High Commissions/ Consulates and for those staying in India on long term visa, the concerned Foreigners Regional Registration Officer (Delhi, Mumbai, Calcutta, and Chennai) would be the same.

The fee for the card, which will have a validity of 20 years, would be US $1000.

Besides making their journey back to their roots simpler, easier and smoother, this Scheme entitles the PIOs to a wide range of economic, financial, educational and cultural benefits. The benefits envisaged under the Scheme include: -

(i) No requirement of visa to visit India:
(ii) No requirement to register with the Foreigners Registration Officer if continuous stay does not exceed 180 days. If continuos stay exceeds 180 days, then registration is required to be done within a period of 30 days of the expiry of 180 days:
(iii) Parity with Non-Resident Indians in respect of facilities available to the latter in economic, financial, educational fields, etc. These facilities will include:-

(a) Acquisition, holding, transfer and disposal of immovable properties in India except of agricultural/plantation properties;
(b) admission of children in educational institutions in India under the general category quota for NRIs - including medical / engineering college, IITs, IIMs etc.
(c) various housing schemes of Life Insurance Corporation of India, State Governments and other Government agencies;

(iv) All future benefits that would be extended to NRIs would also be available to the PIO Card holders;
(v) However, they shall not enjoy political rights in India.

The above steps would go a long way in renewing and strengthening the emotional bond amongst PIOs with the land of their origin. The attractive features of the Scheme will further exhort them to play an increasingly constructive role in the socio-economic and cultural development of the country of their origin.

MINISTRY OF HOME AFFAIRS NOTIFICATION

(i) This scheme may be called the Scheme for issuance of Person of Indian Origin Card (PIO Card).
(ii) It shall come into force with effect from 31st March 1999.

2. Definition - In this scheme, unless the context otherwise requires.

(a) "Indian Mission" means the Embassy of Indian/ High Commission of India/ Indian Consulate in a foreign country.
(b) "Person of Indian origin" means a foreign citizen not being a citizen of Pakistan, Bangladesh and other countries as may be specified by the Central Government from time to time if.

(i) he/she at any time held a Indian passport; or
(ii) he/she or either of his/her parents or grand parents or great grand parents was born in and permanently resident in India as defined in the Government of India Act, 1935 and other territories that became part of India thereafter provided neither was at any time a citizens of any of the aforesaid countries (as referred to in 2(b)above; or
(iii) he/she is a spouse of a citizen of India or a person of Indian origin covered under (i) or (ii) above.

(c) "PIO Card" means a card issued under this scheme.

3. Form of application for issue/ renewal of a PIO Card:-

An application for issue/renewal of a PIO Card shall be made in the prescribed form and shall be accompanied by documentary evidence to show that the application is a person of Indian origin as defined.

4. Authority to which application is to be made:-

(i) An application for issue of a PIO Card shall be made to an Indian Mission in the country where the applicant is ordinarily resident.
(ii) Applicants already in India on Long Term Visa (more than one year) shall make the application for issue of a PIO Card to the following authorities:-

(A) Those residing in:-

(a) Delhi
Foreigners Regional Registration Officer, Hans Bhavan, I.P.Estate New Delhi - 110002.
(b) Mumbai
Foreigners Regional Registration Officer, Annex II, Commissioner of Police, Craw Ford Market, Mumbai - 400001.
(c) Calcutta
Foreigners Regional Registration Officer, 237, Acharya Jagdish Calcutta - 700020
(d) Chennai
Chief Immigration Officer, Bureau of Immigration, Shastri Bhavan Annex, No.26, Haddows Road, Chennai- 600006.

(B) Those residing in areas other than (A) above:-

Joint Secretary (Foreigners). Ministry of Home Affairs, 1st floor, Lok Nayak Bhavan, Khan Market New Delhi-110003.

5. Authority to grant a PIO Card:-

The authority to grant a PIO Card shall be an officer in an Indian Mission notified for the purpose or the Joint Secretary Ministry of Home Affairs, Government of India or the Foreigners Regional Registration Officer, New Delhi, Mumbai, Calcutta of the Chief Immigration Officer, Chennai.

6. Validity of PIO Card:-

A PIO Card shall be valid for a period of twenty years subject to the validity of the passport of the applicant.

7. Fee:-

A fee of US $1000, inclusive of US $250 (non-refundable) as processing fee, will be payable along with the application. In case of rejection of the application, US $750 shall alone be refunded to the applicant.

8. Facilities to be extended to a PIO Card holder:-

(i) A PIO Card holder shall not require a visa to visit India.
(ii) A PIO Card holder will be exempted from the requirement of registration if his stay in India does not exceed 180 days.
(iii) In the event of continuous stay in India of the PIO Card holder exceeding 180 days, he / she shall have to get himself/ herself registered within 30 days of the expiry of 180 days with the concerned Foreigners Registration Officer at District Headquarter.
(iv) A PIO Card holder shall enjoy parity with NRIs in respect of all facilities available to the latter in the economic, financial and educational fields except in matters relating to the acquisition of agricultural/plantation properties. No parity shall be allowed in the sphere of political rights.

9. Cancellation of PIO Card:-

The Central Government may by order, cancel the PIO Card, if it is satisfied that:

(a) the PIO Card was obtained by means of fraud, false representation or the concealment of any material fact; or
(b) the PIO Card holder has shown himself by act or speech to be disaffected towards the Constitution of India and other laws of India; or
(c) the PIO Card holder is a citizen or subject of any country at war with, or committing external aggression against India; or of any other country assisting the country at war with, or committing such aggression against India;or
(d) the PIO Card holder has been sentenced in India for indulging in acts of terrorism, smuggling of narcotics, arms, ammunitions etc, or has been sentenced for committing an offense punishable with imprisonment up to one year or fine up to rupees ten thousand;or
(e) it is not conducive to the public interest that the person should continue to hold a a PIO Card.

No reasons shall be assigned for withdrawal of the Card.
For more Info.:
PIO-Ministry of External affairs

http://www.indianembassy.org/policy/PIO/Introduction_PIO.html

 

Current Updates

Reserve Bank simplifies facilities for financial transactions by Non-resident Indians

Reserve Bank of India announced measures to further simplify financial transactions by Non-resident Indians (NRIs) / Persons of Indian Origins (PIOs) as indicated below. After these changes have become effective, NRIs/PIOs will be able to undertake most financial transactions, under approved schemes announced by the Government/Reserve Bank from time to time with the same ease as residents in India.

Other transactions by NRIs/PIOs

To facilitate various other transactions by NRI/PIOs, Reserve Bank has granted general permissions to:

  1. Resident individuals, partnership/ proprietorship concerns to avail of interest bearing rupee loans from NRIs/PIOs out of funds remitted by them from abroad or out of funds held in their bank accounts in India, on non-repatriation basis, subject to certain conditions one of them being that the rate of interest on such loans should not exceed Bank Rate plus two percentage points.
  2. NRIs/PIOs to transfer by way of gift shares held by them in Indian companies and to PIOs to transfer by way of gift immovable property held by them in India to registered charitable trusts/organizations subject to compliance with other applicable rules/regulations including the provisions of Foreign Contribution Regulations Act, 1976 by the charitable trust/organisation concerned.
  3. NRIs/OCBs for investment on repatriation basis in Air Taxi operations subject to, among other conditions, that the approval of the Director General of Civil Aviation has been obtained
  4. All domestic public/private sector mutual funds for issue of Units to NRIs/PIOs/OCBs on both repatriation as well as non-repatriation basis.
  5. NRIs/PIOs/OCBs to place deposits with Indian firms, on non-repatriation basis and with Indian companies including Non-banking financial companies on both repatriation and non-repatriation basis.
  6. NRIs/PIOs/OCBs for sale of shares acquired under direct investment Schemes on stock exchanges in India.

RBI to grant general permission to NRIs/PIOs/OCBs to invest in Government Securities and treasury bills while granting permission for investment in shares and debentures under the portfolio scheme.

Taking into account the facilities that are already available, and the above new measures, NRIs/PIOs will not have to seek specific permission of the RBI for a whole variety of approved financial/investment transactions. This should considerably reduce paper work and time taken for undertaking such transactions.

After the above changes come into effect, the areas in which facilities available to NRIs/PIOs/OCBs will not be the same as available to domestic residents, will primarily relate to investment by them in real estate/agriculture and plantation business.

Enhancement in the limits on investments by NRIs/PIOs/OCBs in Indian Companies through markets:

In his Budget speech 1998-99, the Finance Minister had announced an increase in NRI Portfolio investment ceiling. The following modifications are made in the NRIs/PIOs/OCBs investment ceiling for purchase of shares in a company through stock exchanges under the portfolio investment scheme:

  1. Investment limit by a single Non-Resident Indian/Person of Indian origin/ Overseas Corporate Bodies in a company will be enhanced from the existing level of 1% to 5% of the paid up capital of the company.
  2. The aggregate limit for all NRIs/PIOs/OCBs investment through the secondary market in a company will be raised from the existing level of 5% to 10% of the paid up equity capital.
  3. The earlier facility of aggregate investment by all NRIs/PIOs/OCBs through stock exchanges upto the enhanced limit of 24% subject to the General Body Resolution of a company would continue to be operative.
  4. Such investments would be fully repatriable and will be without any lock in period.

Ministry of Finance vide Press Note No-F.10/15/98-NRI dt. 22.6.98 has provided that the individual and aggregate ceiling for portfolio investment by NRIs/PIOs/OCBs will be exclusive of the aggregate portfolio investment ceiling for FIIs. The NRIs/PIOs/OCBs aggregate portfolio investment ceiling would be 10% of the paid up equity capital of a company. FII investment would continue to be subject to a separate aggregate ceiling of 24%/30% of the paid up equity capital of a company.

To facilitate speedy approval, the RBI has delegated to designated banks, powers for renewal of general permission already granted to individual NRIs for purchase of shares through stock exchanges. The permission is valid for a period of five years.

Portfolio Investment by NRIs/PIOs/OCBs permitted in unlisted securities in Indian companies:

NRIs/PIOs/OCBs are permitted to invest in listed securities of the Indian Companies through secondary markets under the existing

ISSUANCE OF DOMESTIC CREDIT CARDS TO NRIs

Now Banks are permitted by RBI to issue Rupee Credit Cards to NRIs and Persons of Indian origin, valid in India, Nepal and Bhutan and also to debit NRE/NRO/NRSR accounts of such card holders towards settlement of liabilities arising out of usage of said cards

SIMPLIFICATION OF NRI INVESTMENT PROCEDURES - GENERAL PERMISSION GRANTED BY RBI:

  • RBI has granted general permission for the following:
  • Domestic Mutual Funds can accept investment on repatriation as well as on non-repatriation basis.
  • Indian companies can accept investment on repatriation basis.
  • Indian proprietorship concerns, firms and companies can accept investments on non-repatriation bais.
  • Investments in India by NRIs/PIOs/OCBs in Air taxi operations.
  • Sale of shares acquired by NRIs/PIOs/OCBs under direct investment scheme on stock exchange.
  • Transfer by way of gift of rupee securities, shares, bond, debentures held by NRIs/PIOs to registered charitable trusts/organizations in India.
  • Transfer by way of gift of immovable property held in India by PIOs to registered charitable trusts/organizations.