Separate PIS sub-account by NRI
NRI may open a separate sub-account of NRE/NRO account with authorized dealers for routing receipt and payment of transactions relating to purchase and sale of shares and convertible debentures under NRE (PIS) account for investment made on repatriation basis and NRO(PIS) account for investment made on non-repatriation basis. Only permitted debits and credits shall be allowed by Banks – Paragraph 3 of Schedule 3 of Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 amended w.e.f. 27-2-2013.
Account by foreign national resident in India
A foreign national resident in India can open a normal resident account in Rupees. [This is not ‘NRO’ account]. There are no restrictions on such account from FEMA point of view. Funds from the account can be repatriated abroad if (a) They were received from abroad or (b) They are repatriable under provisions of FEMA. – – Net salary payable to a person who is resident but not permanently resident of India is allowed to be remitted abroad for maintenance of his close relatives abroad. Net salary means salary after deduction of income tax, provident fund and other deductions. The person may be (a) citizen of foreign State other than Pakistan or (b) citizen of India but on deputation to the office or branch or subsidiary or joint venture in India of a foreign company. The person may be in employment or on deputation or for specific job or assignment which does not exceed three years will be a ‘resident but not permanently resident – Schedule III Item 7 of Foreign Exchange Management (Current Account Transactions) Rules, 2000 as amended on 1-5-2003.
Conversion of resident account to NRO account after foreign national leaves India – A foreign national who has opened such account in India may leave the country and go out of India for business, employment of vocation for uncertain period. However, he may have to collect his pending dues. In such case, his resident account can be converted to NRO account after the foreign national leaves India to other country (except Nepal and Bhutan). The account can continue till his bona fide dues are received. He can remit funds from this account outside India. Remittance upto USD one million per financial year are allowed. The account should be closed after dues are received. Bank should monitor such accounts properly – RBI AP (DIR) Circular No. 70 dated 9-6-2011 [para 9(a)(ii) of RBI Master Circular No. 2/2014-15 dated 1-7-2014 on ‘Non-Resident Ordinary Rupee (NRO) Account’] [earlier RBI Master Circular No. 2/2013-14 dated 1-7-2013].