What changed
This Master Circular consolidates all existing instructions on remittance facilities for NRIs, PIOs, and foreign nationals into a single document. It includes definitions, permissible debits to NRO accounts, and conditions for repatriation of current income and assets. The circular has a sunset clause of one year, expiring on July 1, 2013.
What it means for you
Banks must use this circular as the single reference for processing remittance requests from NRIs, PIOs, and foreign nationals. It clarifies that current income like rent, dividend, and pension can be repatriated from NRO accounts or via CA certification. Asset repatriation requires RBI approval unless covered under FEMA provisions.
What you must do
- Update internal guidelines to align with this Master Circular for remittance processing.
- Ensure NRO account debits for current income repatriation are permissible and tax-compliant.
- Verify NRI/PIO status using the defined criteria before allowing asset repatriation.
- Prepare for the sunset clause by planning to adopt the updated circular by July 1, 2013.
Who it affects
All Authorised Dealer Category – I banks, Authorised banks handling remittances, NRIs and PIOs seeking remittance facilities, Foreign nationals on employment in India
Can NRIs repatriate current income without an NRO account?
Yes, banks can allow repatriation based on a Chartered Accountant certificate confirming eligibility and tax payment.
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 held an Indian passport, or whose parents/grandparents were Indian citizens, or is a spouse of an Indian citizen or such person.
Does this circular apply to foreign nationals?
Yes, it covers remittance facilities for foreign nationals, including those on employment in India who become residents under FEMA.