RBI/2013-2014/437
A.P. (DIR Series) Circular No. 87
A.P. (DIR Series) Circular No. 87
January 9,
2014
To
All Banks Authorised to
deal in Foreign Exchange
Madam/Sir,
Resident
Bank account maintained by residents in India –
Joint holder – liberalization
Joint holder – liberalization
Attention of Authorised
Dealer (AD) banks is invited to A.P.(DIR
Series) Circular No.12 dated September 15, 2011 in terms of which
individuals resident in India were permitted to include non-resident
close relative(s) (relatives as defined in Section 6 of the Companies
Act, 1956) as a joint holder(s) in their resident savings bank
accounts on “former or survivor” basis. Such non-resident Indian
close relatives are however not eligible to operate the account
during the life time of the resident account holder in terms of said
instructions.
2. Reserve Bank has
received representations that for operational convenience the
Non-Resident Indians (NRIs), as defined in Regulation 2(vi) of FEMA
Notification No.5 dated May 3, 2000, may be permitted to operate such
accounts on “Either or Survivor” basis. Accordingly, on a review,
it has been decided that AD banks may include an NRI close relative
(relatives as defined in Section 6 of the Companies Act, 1956) in
existing / new resident bank accounts as joint holder with the
resident account holder on “Either or Survivor” basis subject to
the following conditions:
- Such account will be treated as resident bank account for all purposes and all regulations applicable to a resident bank account shall be applicable.
- Cheques, instruments, remittances, cash, card or any other proceeds belonging to the NRI close relative shall not be eligible for credit to this account.
- The NRI close relative shall operate such account only for and on behalf of the resident for domestic payment and not for creating any beneficial interest for himself.
- Where the NRI close relative becomes a joint holder with more than one resident in such account, such NRI close relative should be the close relative of all the resident bank account holders.
- Where due to any eventuality, the non-resident account holder becomes the survivor of such an account, it shall be categorized as Non-Resident Ordinary Rupee (NRO) account as per the extant regulations.
- Onus will be on the non-resident account holder to keep AD bank informed to get the account categorized as NRO account and all such regulations as applicable to NRO account shall be applicable.
- The above joint account holder facility may be extended to all types of resident accounts including savings bank account.
4. While extending this
facility the AD bank should satisfy itself about the actual need for
such a facility and also obtain the following declaration duly signed
by the non-resident account holder:
“I am the joint
account holder of SB/FD/RD/Current Account bearing No ……. which
stands in my name and in the name of Shri/Smt. ……….. who is my
………. (state relationship). I hereby undertake that I shall not
use the proceeds lying in the above account for any transaction in
contravention of the provisions of the Foreign Exchange Management
Act (FEMA) 1999, Rules/Regulations made thereunder and the related
circulars/instructions issued by the Reserve Bank from time to time.
I further undertake that if any such transaction is put through the
said account in contravention of the FEMA, 1999 or Rules/Regulations
made thereunder, I shall be held responsible for the same. I shall
intimate my bank in the event of any change in my Non-resident /
Resident status.”
5. Authorised Dealer
Category – I banks may bring the contents of this circular to the
notice of their constituents and customers concerned.
6. The directions
contained in this circular have been issued under Section 10(4) and
Section 11(1) of the FEMA, 1999 (42 of 1999) and are without
prejudice to permissions/approvals, if any, required under any other
law.
Yours
faithfully,
(Rudra
Narayan Kar)
Chief General Manager In-Charge
Chief General Manager In-Charge
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