Regulation No.5 provides for deposit accounts opened with authorised dealers by an NRI under various schemes. These schemes have been detailed in various Schedules to these Regulations. Thus, Schedule 1 contains the details regarding the Non-resident (External) Account Scheme. The terms and conditions subject to which NRE accounts of NRIs can be maintained by authorised dealers or authorised banks have been specified in this Schedule. Generally, there is no change in the earlier NRE Account Scheme contained in Part B of Chapter 13 of ECM of RBI except that the limit for permitting overdraft in the account has been raised from Rs.20,000 to Rs.50,O00. For the purpose of reporting to Reserve Bank authorised dealers/banks may follow the instructions contained in paragraph 13B.25 of ECM (Exchange Control Manual).
As per the Finance Act, 2005 interest on monies standing to the credit of an individual in a Non-Resident (External Account) would continue to be Exempt even after 31.03.2005. Likewise, the interest payable by a scheduled bank to a Non-resident or to a person who is not ordinarily resident on deposits in foreign currency as approved by the Reserve Bank of India would continue to be exempt on or after
1.4.2005. (For the latest regulations, please refer to the Exchange Control Manual). |
