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The RBI decision will give NRIs more options in the holding of accounts, and lessen the risk from fluctuations in major currencies.
The Reserve Bank of India (RBI) has said Indians, who have non-resident accounts in the country, can now hold them in any currency which is fully convertible.The move is likely to help NRIs/Persons of India Origin as it will give them more options in the holding of accounts, and lessen the risk from fluctuations in major currencies.
Earlier, FCNR(B) account holders were allowed to hold accounts in only certain currencies such as the Pound Sterling, US dollar, Japanese yen, euro, Canadian dollar and Australian dollar.
“...it has been decided that Authorised Dealer banks in India may be permitted to accept Foreign Currency (Non-Resident) Account (Banks) deposits in any permitted currency.” It may be noted that ‘Permitted currency’ for this purpose would mean a foreign currency which is freely convertible,” RBI said in a notification.
“The Committee to Review the Facilities for Individuals under Foriegn Exchange Management Act, 1999 in its Report has recommended that FCNR(B) accounts may be permitted to be opened in any freely convertible currency,” RBI said.
RBI also said that any citizen who was earlier residing in a foreign country can own or transfer property or other assets in that nation if it was acquired during the time of his residence there.
“... a person resident in India is free to hold, own, transfer or invest in foreign currency, foreign security or any immovable property situated outside India if such currency, security or property was acquired, held or owned by such person when he was resident outside India or inherited from a person who was resident outside India,” RBI said.
In a clarification issued by it regarding repatriation of income and sale proceeds of assets held abroad by NRIs who have returned to India permanently, RBI said an investor can retain and reinvest the income earned on investments made under the Liberalised Remittance Scheme.
The bank said that clarifications are as per relevant sections of the Foreign Exchange Management Act of 1999.