RBI expands scope of non-resident Rupee Accounts - (22 Nov 2019)
Banking
Reserve Bank of India in consultation with Government of India widens scope of Special Non-Resident Rupee accounts (SNRR) aiming to promote the usage of INR products by persons residing outside India. Now, person resident outside India are allowed to open \account for External Commercial Borrowings in INR, Trade Credits in INR, Trade (Export/ Import) Invoicing in INR. Further, Business related transactions outside International Financial Service Centre (IFSC) by IFSC units at GIFT city like administrative expenses in INR, INR amount from sale of scrap, government incentives in INR, etc. are also included. The account will be maintained with bank in India (outside IFSC). Further, restriction on the tenure of SNRR account, which is currently 7 years, is also proposed to be removed.
Any person resident outside India, having a business interest in India, can open a Special Non-Resident Rupee Account (SNRR account) with an authorised dealer for the purpose of putting through bona fide transactions in rupees which are in conformity with the provisions of the Act, rules and regulations made thereunder. The SNRR account carries the nomenclature of the specific business for which it is opened. The debits/ credits and the balances in the account should be incidental and commensurate with the business operations of the account holder. For smooth operation of the SNRR Account, certain other provisions are to be rationalised. Apart from Non-Resident Ordinary (NRO) Account, credit of amount due/ payable to non-resident nominee permitted from account of a deceased account holder to Non-Resident External (NRE) Account or direct remittance outside India through normal banking channels.
The directions have been issued under Sections 10(4) and 11(2) of the Foreign Exchange Management Act, 1999. The Reserve Bank has been taking steps for popularising the cross-border transactions in Indian rupee (INR), especially in respect of external commercial borrowing (ECB), trade credit and exports and imports, in order to reduce the exchange risk for persons resident in India.
Tags : SNRR SCOPE EXPANSION
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