NRI

Definition of NRI and PIO clarified by the RBI

Definition of NRI and PIO clarified by the RBI pardesi news 1463929537

The RBI has recently released a new definition of NRI and PIO in April 2016

The Reserve Bank of India (RBI) has recently notified the Foreign Exchange Management (Deposit) Regulations 2016, in suppression of the erstwhile Foreign Exchange Management Regulations 2000 and has released a new definition of NRI and PIO in April 2016.

According to the new notification, “The Definition of NRI and PIO now aligns NRI as a person resident outside India who is a citizen of India and PIOs have been defined to include Overseas Citizen of India cardholders.   The new definitions should not negatively impact PIOs as all the benefits available to NRIs have been extended to PIOs”. This new Definition of NRI and PIO now aligns NRI as a person resident outside India who is a citizen of India and PIOs have been defined to include Overseas Citizen of India cardholders.

RBI has brought in key changes which include Escrow Arrangements that now allow escrow arrangements of up to 25% of the total sale consideration in respect of share transfers involving NRIs for a period of up to 18 months from the date of the transfer agreement.

Permissible Deposits changes that have been introduced are just nominal including the permission to open single non-interest bearing Indian Rupee accounts for routing certain investments into India. A new bank account scheme for NRIs with a business interest in India has now been permitted.

It is however, expected that these new definitions will not negatively impact PIOs as all the benefits available to NRIs have been extended to PIOs. In spite of such clarifications NRIs and PIOs are advised to consult experts, accountants, and bank authorities to fully understand and apply the new regulations. 

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Patrick Callahan

Pardesi News Reporter

Pardesi News Reporter

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