What changed
RBI issued Master Circular No.02/2011-12 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 The circular includes a sunset clause, meaning it will be withdrawn on July 1, 2012, and replaced with an updated version. It references FEMA Notifications No.13/2000-RB and No.21/2000-RB dated May 3, 2000, as the governing legal framework.
What it means for you
Banks must now refer to this single Master Circular for all remittance-related instructions, replacing multiple earlier circulars. The consolidation simplifies compliance but requires banks to stay updated as the circular expires in one year. Authorised dealers must ensure remittances of current income and assets adhere to the defined NRI/PIO criteria and tax certification requirements.
What you must do
- Update internal compliance manuals to reference this Master Circular for NRI/PIO remittance processing.
- Train staff on the definitions of NRI and PIO as per FEMA Notification No.13/2000-RB to avoid misclassification.
- Ensure remittance of current income (e.g., rent, dividend, pension) from NRO accounts or via CA certification is properly documented and tax-compliant.
- Monitor the sunset clause and prepare for the updated Master Circular expected by July 1, 2012.
Who it affects
All Authorised Dealer Category – I banks, Authorised banks handling NRI/PIO remittances, Non-Resident Indians (NRIs), Persons of Indian Origin (PIOs), Foreign nationals seeking remittance facilities
What is the definition of NRI under this Master Circular?
NRI means a person resident outside India who is a citizen of India, as per Regulation 2 of FEMA Notification No.13/2000-RB dated May 3, 2000.
Can NRIs remit current income without an NRO account?
Yes, authorised dealer banks may allow repatriation of current income like rent, dividend, or pension based on a Chartered Accountant certificate confirming eligibility and tax payment or provision.
What is the sunset clause for this Master Circular?
The circular has a sunset clause of one year and will stand withdrawn on July 1, 2012, to be replaced by an updated Master Circular.