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Resident Bank account maintained by residents in India – Joint holder – liberalisation
Presently, individuals resident in India can include Non-Resident Indian (NRI) close relative(s) 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. However, such NRI close relatives cannot operate the said account during the life time of the resident account holder.
This circular provides that individuals resident in India can now include NRI close relative(s) as defined in Section 6 of the Companies Act, 1956 as a joint holder(s) in their new/existing resident savings bank accounts/other bank accounts on “either or survivor” basis. The NRI has to give a declaration in the prescribed format stating that he/she will not use the proceeds lying in the above account for any transaction in contravention of FEMA and in case of any violation he/she will be responsible for the same.
The above liberalisation is subject to the following: –
a) The said account will be treated as resident bank account for all purposes and all regulations applicable to a resident bank account will be applicable.
b) Cheques, instruments, remittances, cash, card or any other proceeds belonging to the NRI close relative cannot be credited to the said account.
c) The NRI close relative can operate the said account only for and on behalf of the resident for domestic payment and not for creating any beneficial interest for himself.
d) Where the NRI close relative becomes a joint holder with more than one resident in the said account, such NRI close relative must be the close relative of all the resident bank account holders.
e) Where due to any eventuality, the non-resident account holder becomes the survivor of the said account the same must be categorised as Non- Resident Ordinary Rupee (NRO) account and all such regulations as applicable to NRO account shall be applicable. Onus will be on the NRI account holder to inform the Bank to get the account categorised as NRO account.
