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Friday, December 03, 2021

RBI allowed minorities from Bangladesh, Pakistan to open NRO bank accounts in 2018

An NRO account is a savings or current account held in India that helps non-resident Indians manage income earned in India such as rent, dividends, interest or pension.

By: ENS Economic Bureau | Mumbai |
Updated: December 24, 2019 7:08:40 am
Reserve Bank of India, citizenship amendment act, caa protests, minorities citizenship, what is NRO, bank accounts of minorities from Bangladesh, Pakistani NRO bank accounts, CAA protets Can a Bangladeshi or Pakistani national or an entity owned or controlled from Bangladesh or Pakistan have an account in India? (Representational image)

MORE than a year before Parliament amended the citizenship law (Citizenship Amendment Act), the Reserve Bank of India amended the  Foreign Exchange Management (Deposit) Regulations, 2016, enabling persons belonging to minority communities — Hindus, Sikhs, Buddhists, Jains, Parsis and Christians — from Bangladesh and Pakistan, and residing in India, to open an NRO account (Non-Resident Ordinary Rupee Account Scheme). Such NRO accounts can be converted into a regular bank accounts once they become citizens of India.

However, as in the case of CAA, Muslims from these two countries are excluded from the list of religious communities who can apply for such accounts.

An NRO account is a savings or current account held in India that helps non-resident Indians manage income earned in India such as rent, dividends, interest or pension. An NRI can open a joint NRO account with one or more NRIs or Indian citizens. According to the Foreign Exchange Management (Deposit) (Amendment) Regulations, 2018, issued by the RBI on November 9, 2018, “a person being a citizen of Bangladesh or Pakistan belonging to minority communities in those countries, namely Hindus, Sikhs, Buddhists, Jains, Parsis and Christians, who is residing in India and has been granted a Long Term Visa (LTV) by the Central Government is permitted to open with an authorized dealer only one NRO Account.”

“The said NRO account shall be converted to a resident account once the person becomes a citizen of India within the meaning of the Citizenship Act, 1955. Such accounts can be opened by Authorised Dealers only,” the RBI notification said. The notification allowed even those who have applied for LTV to open the NRO account subject to a review every six months. “A person being a citizen of Bangladesh or Pakistan belonging to minority communities in those countries, namely Hindus, Sikhs, Buddhists, Jains, Parsis and Christians, who is residing in India and has applied for a Long Term Visa (LTV) which is under consideration of the Central Government is permitted to open with an authorised dealer only one NRO account which will be opened for a period of six months and may be renewed at six monthly intervals subject to the condition that the individual holds a valid visa and valid residential permit issued by Foreigner Registration Office (FRO)/ Foreigner Regional Registration Office (FRRO) concerned. Such accounts can be opened by authorised dealers only,” the notification said.

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Can a Bangladeshi or Pakistani national or an entity owned or controlled from Bangladesh or Pakistan have an account in India? “Opening of accounts by individuals or entities of Pakistan nationality or ownership and entities of Bangladesh ownership requires prior approval of the Reserve Bank,” the RBI said in its FAQ (frequently asked questions).

The opening of such NRO accounts will be subject to reporting the details of the accounts opened by the concerned authorised bank to “the Ministry of Home Affairs (MHA) on a quarterly basis as instructed vide AP (DIR Series) Circular No. 28 dated March 28, 2019”, the RBI says.

“However, individuals of Bangladesh nationality can open an NRO account subject to the individual(s) holding a valid visa and valid residential permit issued by Foreigner Registration Office (FRO)/ Foreigner Regional Registration Office (FRRO) concerned,” it says.

The central bank clarification in its comments on FAQ doesn’t mention about Pakistani nationals getting permission to open NRO accounts. The RBI did not reply to an email on the subject sent by The Indian Express.

Bankers refused to go on record saying that these are matters decided by the regulator and the government. However, a banker said the RBI decision a year ago might be a precursor to the CAA and part of the groundwork to grant citizenship to minorities in Pakistan and Bangladesh.

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