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Foreign bank accounts held by indian nationals

haroon (it assistant) (5 Points)

18 November 2016

hi,

I was working in london for almost 7 years from 2008 to 2014 as a it assistant after which i came back and am working here now and the barclays account that i had there is still active, they had provided me with a debit card.

it has 1 lac inr as balance in it about 800 Gbp

so under the liberalised remittance scheme or Bank Accounts and other Assets Overseas of Residents

i read the rbi guidelines ...but some terms dont make sense ....

can i keep the account ??

how much can i hold in the account legally without getting into any trouble ??

thanks

please help

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5 Replies

Dharmesh (Student) (1025 Points)
Replied 18 November 2016

Hi ,

Hi ,
Just a few points that i know..not completely sure though...so do take opinions on this..
1 - Liberalized Remittance Scheme is for investments by resident individuals and would not apply in your case.
2 - Under FEMA, a resident in India is free to hold, own, transfer or invest in assets situated outside India. However, those assets must have been acquired or owned when they were a resident outside India or inherited from a person who was resident outside India. So i guess you can freely hold the bank account.
3 - This should be discussed with your banker as well because this may become an RFC account..
4 - The Income Tax implications should be looked into. For eg tax on interest earned on these balances held.

haroon (it assistant) (5 Points)
Replied 19 November 2016

thanks for your reply

the interest earned is horrible for pounds 800 is 0.96 pence which is roughly 80 indian rupees....

i also wanted to know how much be held in such accounts legally....because the rbi link for "Bank Accounts and other Assets Overseas of Residents" says indian can hold upto 2.5 lac inr in foreign accounts??

is this true?

please let me know if you have any idea

thanks

Dharmesh (Student) (1025 Points)
Replied 19 November 2016

Can you just post here the specific point from that notification or circular.

Prima facie it seems that this should be for residents in india who open bank accounts abroad and not for person resident outside india continuing to hold the bank account on their return to india..(as mentioned by me in the 2nd point)

haroon (it assistant) (5 Points)
Replied 19 November 2016

you are right about that

it is for residents in india who open bank accounts abroad and not for person resident outside india continuing to hold the bank account on their return to india

also

i made a mistake this article i was talking about is very old

" Bank Accounts and other Assets Overseas of Residents"

link https://www.rbi.org.in/scriptts/ECMUserView.aspx?Id=47&CatID=10

posted by the rbi is dated : May 31, 2005

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i think that this rediff business report from 2014 clarifies what you were saying earlier

https://www.rediff.com/business/report/black-money-trail-when-is-a-foreign-bank-account-illegal/20141028.htm

" a resident of India, who was a non-resident Indian earlier and had opened a foreign bank account at that time, can continue to hold and maintain it even after returning to India.

Fema provisions allow such a person to use foreign bank accounts for any purpose, without any monetary limits.

thank you very much for your help sir

haroon