RESERVE BANK OF INDIA (“RBI”) UPDATES: *1. Liberalisation of joint savings bank account maintained by residents in India*
* * *The RBI has vide circular dated 15th September 2011 (RBI/2011-12/173 A.P. (DIR Series) Circular No. 12) permitted individuals resident in India to include non resident close relative(s) (relatives as defined in section* *6 of the Companies Act, 1956) as a joint holder(s) in their resident bank accounts on 'former or survivor' basis. However, such Non-Resident Indian (“ **NRI**”) close relative(s) shall not be eligible to operate the* *account during the life time of the resident account holder.* 2. *Provision regarding NRI/ Person(s) of Indian Origin (“PIOs”) holding NRE/FCNR (B) accounts jointly with Indian resident close relative* *RBI has vide circular dated 15th September 2011 * *(RBI/2011-12/174 A.P. (DIR Series) Circular No. 13) permitted NRIs (as defined in FEMA Notification No.5/2000-RB dated 3rd May 2000), to open NRE /FCNR(B) account with their resident close relative (relative as defined in Section 6 of the Companies Act, 1956) on 'former or survivor' basis. The resident close relative shall be eligible to operate the account as a power of attorney holder in accordance with extant instructions during the life time of the NRI/ PIO account holder.* *3. Gift and Loans in rupees by resident individuals to NRI close relatives* *RBI has vide circular dated 16th September 2011* *(RBI/2011-12/179 A.P. (DIR Series) Circular No. 17) permitted a resident individual to make a rupee gift to a NRI/PIO who is a close relative of the resident individual (relative as defined in Section 6 of the Companies Act, 1956) by way of crossed cheque /electronic transfer. The amount should be credited to the Non-Resident (Ordinary) Rupee Account (NRO) account of the NRI / PIO and credit of such gift amount may be treated as an eligible credit to NRO account. The gift amount should be within the overall limit of USD 2,00,000/- per financial year as permitted under the Liberalised Remittance Scheme (LRS) for a resident individual.* * * *Further, the RBI has vide circular dated 16th September* *2011 (RBI/2011-12/180 A.P. (DIR Series) Circular No.18) permitted a resident individual to lend to an NRI/PIO close relative (relative as defined in Section 6 of the Companies Act, 1956) by way of crossed cheque /electronic transfer subject to the certain conditions as* *prescribed under the circular.* *4. Repayment of loans of non-resident close relatives by residents* *RBI has vide circular dated 16th September 2011* *(RBI/2011-12/183 A.P. (DIR Series) Circular No. 19) decided that where an authorised dealer in India has granted loan to an NRI in accordance with Regulation 7 of the Notification No. FEMA 4/2000-RB dated 3rd May 2000 (Acceptance of deposits by persons other than authorised dealer/ authorised bank), such loans may also be repaid by resident close relative (relative as defined in Section 6 of the Companies Act, 1956) of the NRI by crediting the borrower's loan account through the bank account of such relative.* *5. Meeting of medical expenses of non-resident close relatives by resident individuals **RBI has vide circular dated 16th September 2011* *(RBI/2011-12/184 A.P. (DIR Series) Circular No. 20) decided that where the medical expenses in respect of an NRI close relative (relative as defined in Section 6 of the Companies Act, 1956) are paid by a resident* *individual, such a payment being in the nature of a resident to resident transaction, may be covered under the term “services related thereto” under Regulation 2(i) of Notification No. FEMA 16 /2000- RB dated May 3, 2000 (Receipt from, and payment to, a person resident outside India). The said Regulation 2(i) permits a person resident in India, to make any payment in rupees towards meeting expenses on account of boarding, lodging and services related thereto of a person resident outside India who is on a visit to India**.* * * * * * * *Extract of Section 6 of the Companies Act, 1956* * * *Meaning of “**relative**”* *A person shall be deemed to be a relative of another if, and only if,-* *(a) they are members of a Hindu undivided family; or* *(b) they are husband and wife; or* *(c) the one is related to the other in the manner indicated in Schedule IA. * * * * * *Schedule IA* *List of Relative* *1. Father* *2. Mother (including step-mother)* *3. Son (including step-son)* *4. Son’s wife* *5. Daughter (including step-daughter)* *6. Father’s father* *7. Father’s mother* *8. Mother’s mother* *9. Mother’s father* *10. Son’s son* *11. Son’s son’s wife* *12. Son’s daughter* *13. Son’s daughter’s husband* *14. Daughter’s husband* *15. Daughter’s son* *16. Daughter’s son’s wife* *17. Daughter’s daughter* *18. Daughter’s daughter’s husband* *19. Brother (including step-brother)* *20. Brother’s wife* *21. Sister (including step sister)* *22. Sister’s husband*** * * -- *"Change" is a Nature of life, * *But "Challenge" is an aim of life * * so always challenge the changes * *not change the challenges!! * **** **** <http://groups.yahoo.com/group/sometimeonthenet/join>*V a n a k k a m S u b b u* <http://groups.yahoo.com/group/sometimeonthenet/join> * * *வாழிய செந்தமிழ்! வாழ்க நற்றமிழர்! **வாழிய பாரதமணித் திருநாடு!*
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