Fema updates regarding opening Foreign Currency- Non resident account

Dear Friends,
Please find herewith latest FEMA Updates regarding Opening Foreign Currency (Non-Resident) Account and Liberalized Remittance Scheme - Clarification
RBI/2011-12/225
A.P. (DIR Series) Circular No. 36
October 19, 2011Opening Foreign Currency (Non-Resident) Account (Banks) Scheme
[FCNR(B)] account in any freely convertible currency – liberalisationAttention of Authorised Dealer (AD) banks is invited to the Paragraph 2 of Schedule 2 to the Notification No.FEMA 5/2000-RB dated May 3, 2000, viz. Foreign Exchange Management (Deposit) Regulations, 2000, as amended from time to time, read withNotification No. FEMA 14/2000-RB dated May 3, 2000, viz. Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2000, as amended from time to time, in terms of which deposit of funds in the Foreign Currency (Non-Resident) Account (Banks) Scheme [FCNR(B)] accounts may be accepted in such permissible currencies as may be designated by the Reserve Bank from time to time. Presently, Pound Sterling, US Dollar, Japanese Yen, Euro, Canadian Dollar and Australian Dollar are the currencies designated by the Reserve Bank.
2. The Committee to Review the Facilities for Individuals under FEMA, 1999 in its Report has recommended that FCNR(B) accounts may be permitted to be opened in any freely convertible currency.
3. On a review, it has been decided that AD banks in India may be permitted to accept FCNR (B) deposits in any permitted currency. It may be noted that 'Permitted currency' for this purpose would mean a foreign currency which is freely convertible as defined in terms of Regulation 2(v) of FEMA 14/2000-RB dated May 3, 2000, as amended from time to time.
4. Authorised Dealer banks may bring the contents of this circular to the notice of their account holders concerned.
5. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law.

RBI/2011-12/226
A.P. (DIR Series) Circular No. 37
October 19, 2011 (i) Repatriation of income and sale proceeds of assets held abroad by NRIs who have returned to India for permanent settlement (ii) repatriation of income and sale proceeds of assets acquired abroad through remittances under Liberalised Remittance Scheme - ClarificationAttention of the Authorised Dealer (AD) banks is invited to sections 6(4) of the Foreign Exchange Management Act (FEMA), 1999. Further, the attention of AD banks is also invited to section 8 of FEMA, 1999 which states that save as otherwise provided in this Act, where any amount of foreign exchange is due or has accrued to any person resident in India, such person shall take all reasonable steps to realize and repatriate to India such foreign exchange within such period and in such manner as may be specified by the Reserve Bank.
2. The Committee to Review the Facilities for Individuals under FEMA, 1999 has suggested in its Report that necessary clarifications may be issued forthwith clarifying the position that income and sale proceeds of assets held abroad by NRIs who have returned to India for permanent settlement and income and sale proceeds of assets held abroad through remittances under LRS need not be repatriated.
3. Accordingly, it is clarified as under:
(a) in terms of sub-section 4 of Section (6) of FEMA, 1999, 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.
(b) an investor can retain and reinvest the income earned on investments made under the Liberalised Remittance Scheme.
4. AD banks may bring the contents of this circular to the notice of their constituents/customers concerned.



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With regards,
Manoj Pandey
Wisdom Management Consultancy Private Limited
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