DIASPORA

RBI allows foreigners to open rupee accounts abroad

Wednesday, 22 Jan, 2025
(Photo courtesy: Wikimedia Commons)

New Delhi: The Reserve Bank of India (RBI), in collaboration with the central government, has reviewed the current regulations under the Foreign Exchange Management Act (FEMA), 1999. As a result of these amendments, authorized dealer banks' overseas branches can now open INR accounts for residents outside India, facilitating the settlement of all permissible current and capital account transactions with residents in India.
 
According to a press release issued by the RBI, residents outside India can use the balances in their repatriable INR accounts, such as the Special Non-resident Rupee Account (SNRA) and SRVA, to settle legitimate transactions with other non-resident individuals.

Residents outside India can use their repatriable INR account balances for foreign investments, including Foreign Direct Investment (FDI) in non-debt instruments, the release stated, adding that Indian exporters are now allowed to open foreign currency accounts abroad to settle trade transactions, receive export proceeds, and use those funds to pay for imports.

In December 2023, the Foreign Exchange Management (Manner of Receipt and Payment) Regulations were updated to enable cross-border transactions in all foreign currencies, including the local currencies of trading partner countries, as well as the INR.