RBI has released a circular on 28th March, 2019 to all Category – I Authorised Dealers (ADs) regarding the changed norms for opening of accounts by foreign portfolio investors (FPIs) and foreign venture capital investors (FVCIs), and opening of non-resident ordinary (NRO) account by long-term visa (LTV) holders.
Following instructions have been given to Authorised Dealers (ADs) by the RBI:
Foreign Portfolio Investors (FPIs) and Foreign Venture Capital Investors (FVCIs)
ADs may allow a FPIs and FVCIs registered with SEBI to open and maintain a non-interest bearing foreign currency account for the purpose of making investment in accordance with FEMA Regulations.
Non-resident Ordinary (NRO) Account
ADs may open one NRO Account for a citizen of Bangladesh or Pakistan, belonging to minority communities in those countries (i.e. Hindus, Sikhs, Buddhists, Jains, Parsis and Christians), residing in India with Long Term Visa (LTV). NRO Account will be converted to a Resident Account after acquiring citizenship. NRO Account can also be opened for applicants of LTV having valid visa and valid residential permit, for a period of 6 months subject to renewal.
ADs shall report opening of NRO accounts to Ministry of Home Affairs (MHA) on a quarterly basis to the Under Secretary (Foreigners), Ministry of Home Affairs, NDCC-II Building, Jai Singh Road, New Delhi – 110 001.
Special Non-Resident Rupee (SNRR) Account
SNRR accounts opened by persons resident outside India may remain operative beyond the tenure of seven years subject to RBI approval. Further, the restriction of seven years will not be applicable to SNRR accounts opened by persons resident outside India who are registered with SEBI and wish to make investment in India in accordance with FEMA Regulations.
Escrow Accounts
Escrow Accounts can be opened by residents and non-residents for acquisition/transfer of capital instruments/convertible notes and can also be funded by guarantee(s)
Earlier by Foreign Exchange Management (Deposit) (Amendment) Regulations, 2018 (notified on November 09, 2018), RBI has made the above stated changes in Foreign Exchange Management (Deposit) Regulations, 2016.
Click here for the circular.
Click here for the amendment.
