What changed
This Master Circular consolidates existing instructions on remittance facilities for NRIs, PIOs, and foreign nationals into a single document, listing underlying circulars/notifications in the Appendix. It includes definitions, permissible remittances (e.g., current income, asset sale proceeds), and procedural requirements like CA certification for non-NRO account holders. The circular has a sunset clause of one year, expiring on July 1, 2014, after which an updated version will be issued.
What it means for you
Banks must use this circular as a general guide but rely on original notifications for detailed rules. It clarifies that remittance of capital asset sale proceeds requires RBI approval unless covered under FEMA. The sunset clause means banks should prepare for annual updates and ensure compliance with the latest instructions.
What you must do
- Review the Master Circular for consolidated remittance rules and update internal procedures accordingly.
- Ensure NRO account debits for current income (rent, dividend, pension, interest) are permissible; require CA certification for non-NRO account holders.
- Refer to underlying FEMA notifications (No.13/2000-RB and No.21/2000-RB) for detailed compliance on asset repatriation.
- Prepare for the sunset clause by tracking the July 1, 2014 expiry and subsequent updated circular.
- Train staff on NRI/PIO definitions and documentation requirements for remittance requests.
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 and PIO under this circular?
NRI means a person resident outside India who is a citizen of India. PIO means a citizen of any country other than Bangladesh or Pakistan who held an Indian passport, or whose parents/grandparents were Indian citizens, or who is a spouse of an Indian citizen or such person.
Can NRIs remit current income without an NRO account?
Yes, AD banks may allow repatriation of current income like rent, dividend, pension, interest for NRIs without an NRO account, based on a Chartered Accountant certification confirming eligibility and tax compliance.
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The circular has a sunset clause of one year and will stand withdrawn on July 1, 2014, to be replaced by an updated Master Circular on the same subject.