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
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.