Residents Can Now Pay Medical Bills for NRI Relatives (2011 Circular)
Current · Source: Reserve Bank of India · RBI/2011-12/184 · issued 16 Sep 2011 · ~1 min read
Quick answerRBI allows resident individuals to pay medical expenses of their NRI relatives visiting India, treating it as a resident-to-resident transaction under existing FEMA rules. This expands earlier permissions that only covered boarding, lodging, and travel.
The rule, in the simplest words
Residents can now pay medical bills for their NRI relatives visiting India.
This is treated as a resident-to-resident transaction under existing FEMA rules.
Medical expenses are classified under 'services related thereto' in FEMA Notification No. 16.
How it plays out — a real example
Rahul, a forex & trade-finance officer in Indore, helped his customer, Mr. Kumar, pay for his NRI son's medical expenses in India. Mr. Kumar's son was visiting India for treatment, and Rahul facilitated the payment of his medical bills using the new RBI rule. This allowed Mr. Kumar to support his son's medical needs without any hassle.
What changed
Previously, residents could only pay for boarding, lodging, and travel expenses of visiting NRIs. Now, medical expenses of NRI relatives (as defined under Section 6 of the Companies Act, 1956) are also permitted, classified under 'services related thereto' in FEMA Notification No. 16.
What it means for you
Banks can now process rupee payments by residents for medical bills of their NRI close relatives without requiring separate FEMA approval. This simplifies cross-border family support and reduces compliance burden for both customers and AD banks.
What you must do
Update internal FEMA guidelines to include medical expenses under permissible resident-to-resident payments for NRI close relatives.
Train staff to accept and process such payments without requiring additional FEMA documentation.
Communicate this facility to customers through branch notices and digital channels.
Ensure proper record-keeping to distinguish these transactions from other remittance types.
Who it affects
Resident individuals with NRI close relatives, Authorised Dealer (AD) banks, NRI/PIO customers visiting India
❓ Common questions
Who qualifies as a 'relative' under this circular?
The circular uses the definition of 'relative' as per Section 6 of the Companies Act, 1956, which includes spouse, parents, children, siblings, and other specified family members.
📜 Read the original circular — full text as issued by RBI
RBI/2011-12/184
A.P. (DIR Series) Circular No. 20
September 16, 2011
To
All Banks Authorised to Deal in Foreign Exchange
Madam / Sir,
Meeting of Medical expenses of NRIs close relatives
by Resident Individuals
Attention of Authorised Dealer (AD) banks is invited to para 2 of the Notification No. FEMA 16/RB-2000 dated May 3, 2000 viz. Receipt from and Payment to, a Person Resident Outside India, as amended from time to time, in terms of which a resident may make payment in rupees towards meeting expenses on account of boarding, lodging and services related thereto or travel to and from and within India of a person resident outside India who is on a visit to India.
2. The Committee to review the facilities for individuals under the Foreign Exchange Management Act (FEMA), 1999 has in its Report recommended that the ambit of FEMA Notification No.16/RB-2000 dated May 3, 2000 may be expanded to include permission to residents to bear medical expenses of visiting NRIs/PIOs.
3. The extant position has been reviewed and it has been decided that where the medical expenses in respect of NRI close relative (relative as defined in Section 6 of the Companies Act, 1956) are paid by a resident individual, such a payment being in the nature of a resident to resident transaction may be covered under the term “services related thereto” under Regulation 2(i) of Notification No. FEMA 16 /2000- RB dated May 3, 2000, ibid.
4. AD banks may bring the contents of this circular to the notice of their constituents and customers concerned.
5. 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
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2011-12/184 · issued 16 Sep 2011. The plain-English explanation above is BankPulse’s own independent summary.
Communicate this facility to customers through branch notices and digital channels.
⚙️ Operations
Ensure proper record-keeping to distinguish these transactions from other remittance types.
📜 Compliance
Update internal FEMA guidelines to include medical expenses under permissible resident-to-resident payments for NRI close relatives.
Train staff to accept and process such payments without requiring additional FEMA documentation.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are a Compliance officer at a bank this circular applies to (Resident individuals with NRI close relatives, Authorised Dealer (AD) banks, NRI/PIO customers visiting India), your first concrete step on “Residents Can Now Pay Medical Bills for NRI Relatives (2011 Circular)” is: “Update internal FEMA guidelines to include medical expenses under permissible resident-to-resident payments for NRI close relatives.” (RBI issued this 16 Sep 2011).
Circular: RBI/2011-12/184 -- Residents Can Now Pay Medical Bills for NRI Relatives (2011 Circular)
Issued: 16 Sep 2011
Action required: Update internal FEMA guidelines to include medical expenses under permissible resident-to-resident payments for NRI close relatives.
Action required: Train staff to accept and process such payments without requiring additional FEMA documentation.
Action required: Communicate this facility to customers through branch notices and digital channels.
Action required: Ensure proper record-keeping to distinguish these transactions from other remittance types.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=6716&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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