What changed
RBI issued Master Circular No.04/2009-10 consolidating all existing instructions on remittance facilities for NRIs, PIOs, and foreign nationals into a single document. The circular includes a sunset clause, meaning it will be withdrawn on July 1, 2010, and replaced by an updated version. It references FEMA Notifications 13/2000-RB and 21/2000-RB as the governing legal framework.
What it means for you
Banks must now refer to this master circular as the single source for remittance rules, replacing earlier scattered circulars. The one-year sunset clause signals that RBI expects periodic updates, so banks should track future revisions. AD banks are responsible for verifying eligibility and tax compliance before allowing remittances, especially for current income and asset transfers.
What you must do
- Update internal compliance manuals to reference this master circular for NRI/PIO remittance processing.
- Ensure staff are trained on the consolidated definitions of NRI and PIO, noting that PIO excludes Bangladesh and Pakistan citizens, while NRI is a citizen of India resident outside India.
- Verify tax compliance (CA certificate) before permitting remittance of current income for NRIs without an NRO account; for NRO accounts, current income is a permissible debit.
- Monitor the sunset date (July 1, 2010) and prepare for the next updated circular.
- Maintain records of remittance approvals as per the operational instructions in Annex-2.
Who it affects
All Authorised Dealer Category – I banks, All Authorised banks, NRI and PIO customers, Foreign nationals of non-Indian origin residing in India
Can NRIs remit rent or pension income without an NRO account?
Yes, AD banks may allow such remittance based on a Chartered Accountant certificate confirming eligibility and tax payment or provision.
What is the definition of a Person of Indian Origin (PIO) under this circular?
A PIO is a citizen of any country except Bangladesh or Pakistan, who previously held an Indian passport, or whose parents/grandparents were Indian citizens, or who is a spouse of an Indian citizen or such person.
Does this circular apply to foreign nationals of non-Indian origin?
Yes, it covers remittance of assets by foreign nationals who retired from employment in India, inherited assets from a resident, or are widows of Indian citizens, subject to specific conditions.