The Reserve Bank of India has further liberalised foreign exchange facilities for individuals under the Foreign Exchange Management Act, (FEMA) 1999.The facilities are:
1. NRIs can be Joint Holders in Resident’s SB/EEFC/RFC Accounts
Individual residents in India are now permitted to include non-resident close relative(s) as joint holder(s) in their resident bank accounts, namely, savings(SB), Exporter Earners’ Foreign Currency (EEFC) and Residents’ Foreign Currency (RFC) accounts, on ‘former or survivor’ basis.
2. Residents can be Joint Holders in NRE/FCNR Accounts
Non-Resident Indians (NRIs)/ Person of Indian Origin (PIO) , are now permitted to open Non-Resident (External) (NRE) Rupee Account Scheme/Foreign Currency (Non-Resident) (FCNR) Account (Banks) Scheme with their resident close relative(s) as joint holder(s) on ‘former or survivor’ basis.
3. Residents can gift Shares/Debentures upto USD 50,000 Value
A person resident in India can now give to a person resident outside India, by way of gift, any security/shares/debentures of value upto USD 50,000 in value per financial year subject to certain conditions. Earlier, a person resident in India could give to a person resident outside India, by way of gift, any security/shares/debentures of value upto USD 25,000 per calendar year.
4. Sale Proceeds of FDIs can be credited to NRE/FCNR (B) Account
Sale proceeds of Foreign Direct Investment (FDI) can be credited to Non-Resident (External) Rupee (NRE) Account Scheme/Foreign Currency (Non-Resident) Account FCNR (Banks) Scheme provided the original acquisition was by way of inward remittance or funds held in their NRE/FCNR (B) accounts.
5. Gifts to NRIs can be credited to NRO Accounts in Rupees
Resident individuals are now permitted to make rupee gifts within the overall limit of USD 200,000 per financial year as permitted under the Liberalised Remittance Scheme (LRS) to an NRI/PIO who is a close relative by way of crossed cheque/electronic transfer to the Non-Resident (Ordinary) Rupee Account (NRO) of the NRI/PIO.
6. Loans to NRI Close Relatives can be given in Rupees
Similarly, Resident individuals are now permitted to lend in Rupees within the overall limit under the Liberalised Remittance Scheme of USD 200,000 per financial year to a Non Resident Indian (NRI)/ Person of Indian Origin (PIO) close relative by way of crossed cheque/electronic transfer, subject to certain conditions.
7. Residents can repay the loans given to NRI Close Relatives
Resident individuals are now granted general permission to repay loans availed of in Rupees from banks in India by their NRI close relatives.Earlier, repayment of loans by close relative in respect of Rupee loan availed by NRIs was restricted only to housing loans.
8. Residents can bear Medical Expenses of NRIs
Residents will now be allowed to bear the medical expenses of visiting NRIs/PIOs close relatives. Earlier, residents were allowed to make payment in rupees towards meeting expenses on account of boarding, lodging and services related to it or travel to and from and within India of a person resident outside India and who is on a visit to India.
The Reserve Bank of India had, in the Annual Monetary Policy for 2011-12, announced setting up of a Committee to identify areas for streamlining and simplifying the procedures under Foreign Exchange Management Act, 1999, so as to remove the operational impediments and assess the level of efficiency in the functioning of authorised persons, including the infrastructure created by them. The Committee set up under the Chairmanship of Smt. K.J. Udeshi, submitted its report in early August 2011. The Reserve Bank of India (RBI) placed the Report on its website , examined the recommendations and has taken up some of them for implementation. The relevant circulars are available on the RBI website. The other recommendations of the Committee are being examined.