What changed
This Master Circular consolidates all existing instructions on remittance facilities for NRIs, PIOs, and foreign nationals into one document, replacing multiple earlier circulars. It includes a sunset clause, meaning the circular expires on July 1, 2006, and will be replaced by an updated version.
What it means for you
Banks must now refer to a single master circular for NRI/PIO remittance rules, simplifying compliance. The USD 1 million per calendar year cap for asset repatriation remains, with strict documentation requirements (CA certificate, undertaking). Banks must ensure no remittances to Nepal/Bhutan citizens and restrict property sale proceeds for certain nationalities.
What you must do
- Update internal NRI/PIO remittance policies to reference this Master Circular as the single source of instructions.
- Verify remittance requests against the USD 1 million per calendar year cap and ensure CA certificate and undertaking are obtained.
- Screen applicants for citizenship restrictions: remittance facilities not available to Nepal/Bhutan citizens; no remittance of sale proceeds of immovable property to citizens of Pakistan, Bangladesh, Sri Lanka, China, Afghanistan, Iran, Nepal, Bhutan.
- For NRI/PIO property sales held less than 10 years, ensure sale proceeds are held in NRO account (Savings/Term Deposit) or other eligible investments for the balance period before remittance.
Who it affects
Banks authorised to deal in foreign exchange, Non-Resident Indians (NRIs), Persons of Indian Origin (PIOs), Foreign nationals of non-Indian origin, Chartered Accountants certifying remittance documents
What is the maximum amount an NRI can remit per year under this circular?
An NRI or PIO may remit up to USD 1 million per calendar year from NRO account balances or sale proceeds of assets (including inherited assets), subject to a CA certificate and undertaking.
Are there any nationality-based restrictions on remittance?
Yes. Remittance facilities are not available to citizens of Nepal and Bhutan. Additionally, sale proceeds of immovable property cannot be remitted for citizens of Pakistan, Bangladesh, Sri Lanka, China, Afghanistan, Iran, Nepal, and Bhutan.
What happens if an NRI sells a property held for less than 10 years?
The sale proceeds must be held in an NRO account (Savings/Term Deposit) or in other eligible investments for the balance period to complete 10 years before remittance can be made.