A.P. (Dir Series) (2003-04) Circular No. 89, dated 24-4-2004
Foreign Exchange Management (Deposit)
Regulations, 2000 - Acceptance of Deposits - Revised Guidelines
In terms of Regulation 7(1) and (2) of the Foreign
Exchange Management (Deposit) Regulations, 2000, (issued vide
Notification No. FEMA 5/2000-RB dated May 3, 2000) persons other than
Authorised Dealers/Authorised Banks are permitted to accept deposits from
Non-Resident Indians (NRIs). This includes a company registered under Companies
Act, 1956 (including a non-banking finance company registered with Reserve
Bank) or a body corporate created under an Act of Parliament or State
Legislature who has accepted deposits from NRIs on repatriation basis or a
company or a proprietorship concern or a firm in India which has accepted
deposits from NRIs on non-repatriation basis. The interest earned on such
deposits, being current income, is eligible to be repatriated outside India.
2. The issue relating to
acceptance of deposits from NRIs by persons other than Authorised
Dealers/Authorised Banks has been reviewed in the light of current
developments. It has been decided that deposits by NRIs with persons other than
Authorised Dealers/Authorised Banks by debit to NRO Accounts may continue as
hitherto provided that the amount deposited with such entities does not
represent inward remittances or transfer from NRE/FCNR(B) Accounts into the NRO
account.
3. Deposits by NRIs with persons other than Authorised
Dealers/Authorised Banks out of inward remittances from overseas or by debit to
NRE/FCNR(B) Accounts shall henceforth not be permissible.
4. All persons other than
Authorised Dealers/Authorised Banks may continue to hold any renew existing
deposits held in their books in the name of NRIs on repatriation or
non-repatriation basis, as the case may be. The interest earned on such
deposits will continue to be eligible for repatriation.
5. The revised instructions shall be
applicable with immediate effect.
6. Necessary amendments to
the Foreign Exchange Management (Deposit) Regulations, 2000 are being notified
separately.
7. Authorised dealers may
bring the contents of this circular to the notice of their constituents
concerned.
8. The directions contained
in this circular have been issued under sections 10(4) and 11(1) of the Foreign
Exchange Management Act, 1999 (42 of 1999).