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NRFAD

Rahul Bansal (Finalist) (35929 Points)

08 January 2010

Account Opened by Foreign Nationals and Foreign Tourists

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11 Replies

Rahul Bansal (Finalist) (35929 Points)
Replied 08 January 2010

1. Does QA 22 Account under the erstwhile FERA continue under Foreign Exchange Management Act, 1999 ?

No. With the introduction of Foreign Exchange Management Act, 1999, the accounts opened by foreign nationals who are resident in India are treated as resident accounts. Such accounts are at par with other resident Rupee accounts.

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Rahul Bansal (Finalist) (35929 Points)
Replied 08 January 2010

2. Can foreign nationals resident in India open resident account ?

Yes. Foreign nationals resident in India can open and maintain resident Rupee account in India.

Rahul Bansal (Finalist) (35929 Points)
Replied 08 January 2010

3. Should banks have a separate system to monitor resident accounts maintained by foreign nationals in the absence of QA 22 account ?

From the foreign exchange point of view, no monitoring is required. However, the banks are free to put in place such administrative arrangements as considered necessary for a smooth conduct of accounts, especially in cases where it is likely that a request for repatriation of funds outside India will be made.

Rahul Bansal (Finalist) (35929 Points)
Replied 08 January 2010

4. Can AD-Category I banks remit proceeds of such accounts on closure?

Yes. But AD-Category I banks should ensure that the funds to be repatriated outside India were either received from abroad or are of repatriable in nature or are permissible in terms of RBI .

Rahul Bansal (Finalist) (35929 Points)
Replied 08 January 2010

5. In the absence of QA 22 account how the salary of foreign nationals be remitted?

Banks are free to allow remittance for maintenance of close relatives abroad not exceeding net salary (after deduction of taxes, contribution to provident fund and other deductions) of a person who is resident but not permanently resident in India and is a citizen of a foreign state other than Pakistan.

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Rahul Bansal (Finalist) (35929 Points)
Replied 08 January 2010

6. Can foreign tourists open a bank account in India during their short visit?

Yes. Foreign tourists during their short visit to India can open a Non-Resident (Ordinary) Rupee (NRO) account with any bank dealing in foreign exchange. Such account can be opened upto a maximum period of 6 months.

Rahul Bansal (Finalist) (35929 Points)
Replied 08 January 2010

7. What credits can be made to such accounts?

Funds remitted from outside India or those obtained by sale of foreign exchange brought by the tourists to India can be credited to the NRO account.

Rahul Bansal (Finalist) (35929 Points)
Replied 08 January 2010

8. Can the NRO account be used for making local payments?

Yes. Tourists can freely make local payments by debit to the NRO account.

Rahul Bansal (Finalist) (35929 Points)
Replied 08 January 2010

9. Can foreign tourists repatriate the balance held in their NRO account at the time of departure from India?

Banks have been allowed to convert the balance in the account at the time of departure of the tourists into foreign currency provided the account has been maintained for a period not exceeding six months and the account has not been credited with any local funds, other than interest accrued thereon.

Rahul Bansal (Finalist) (35929 Points)
Replied 08 January 2010

10. What can be done to repatriate the proceeds of an account that has been maintained for more than six months?

In such cases, applications for repatriation of balance may be made on plain paper to the concerned Regional Office of Reserve Bank.

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Rahul Bansal (Finalist) (35929 Points)
Replied 08 January 2010

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