Master Direction - Miscellaneous (Updated as on May 13, 2026)
UR
- Applies toAll regulated entities
- StatusIn force
- IssuedJan 04, 2016
- Amendmentsnone tracked
- Length27 points in 4 sections · 3 min read
The four dates on this rule
- PublishedJan 04, 2016The day RBI put this document out. This is the same day as the Issued date on this rule.
- Starts to applyNot statedNot stated separately in this document. Read the rule itself before you assume a start date.
- Time to get readyNot statedCannot be worked out until the day it starts to apply is known.
- Last date to actNot statedNo date to act by was found in this document. Other dates may sit inside single paragraphs.
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20 of the 27 points name no product and bind every product. All products.
What it says
How firm is each point
Stated by RBI — RBI’s own paragraph says this. We have only made it plainer.
Our reading — BankPulse read RBI’s paragraph and shortened it. The paragraph is the authority, not this line.
Needs judgement — RBI leaves this to the bank to settle, so nobody can give you a fixed number here.
Must know
1. Follow tax law separately
Banks must follow tax rules on their own, apart from FEMA.
2. Residents may keep foreign assets
Residents may freely keep foreign assets they got while living abroad.
3. Use assets without RBI approval
Residents who move back may freely use foreign assets and income earned abroad.
4. Joint account stays a resident
An NRI joint-holder account is still treated fully as a resident bank account.
5. No credit from NRI funds
Cheques or cash belonging to the NRI joint-holder cannot be credited to this account.
6. NRI relative cannot benefit personally
The NRI joint-holder may only act for the resident, not for personal benefit.
7. Survivor account becomes NRO
If the NRI holder becomes sole survivor, the account is reclassified as NRO.
8. No guarantees for overseas units
Indian companies and their banks may not back loans taken by group firms abroad.
9. Funds need specific RBI permission
Money raised abroad this way cannot be used in India without RBI's permission.
10. Breach invites penal action
A bank that sets up such a structure becomes liable for penal action under FEMA.
11. Share records with SIT
Authorised Persons must give the SIT any papers it asks for.
12. Convert inactive deposits to Rupees
Banks must turn an unused foreign currency deposit into Indian Rupees.
13. Deposits convert after three years
This kind of deposit turns into Rupees after three years with no activity.
14. No-maturity deposits need three-month notice
A no-maturity deposit converts to Rupees after three years, following a three month notice.
15. IFSC entities count as non-resident
A financial institution set up in the IFSC is treated as a person resident outside India.
16. IFSC deals follow FEMA rules
Transactions with an IFSC entity follow the same FEMA rules as any non-resident deal.
17. No FEMA case if taxed
No FEMA case can be brought if Black Money Act tax and penalty were already paid.
18. 180 days to bring proceeds
A declared foreign asset may be sold and its proceeds brought to India within 180 days.
19. Sell asset within 180 days
If RBI refuses permission to keep the asset, it must be sold within 180 days.
Do it
1. Reinvest income earned under LRS
Investors may keep and reinvest income earned under the Liberalised Remittance Scheme.
2. Facility extends to all accounts
Banks may offer this joint-holder option on any resident account, even savings accounts.
3. Bank must assess real need
The bank must first satisfy itself that this joint-account facility is genuinely needed.
4. Signed declaration required from NRI
The bank must also obtain a signed declaration from the NRI account holder.
5. Medical payments treated as services
Resident-paid medical bills for a visiting NRI count as a service payment, not a gift.
6. Apply to RBI to keep
To keep the declared asset instead of selling it, apply to RBI within 180 days.
Background
1. Many separate FEMA clarifications
This page covers many small FEMA rules, not one big rule.
2. Covers accounts, deposits and assets
It also covers joint accounts, medical bills, deposits, IFSC rules and foreign assets.