The new regulation, announced by the Reserve Bank of India (RBI), would benefit scores of foreign nationals in India — working in areas such as IT, banking and multinational firms.
Earlier, their resident accounts were closed immediately once they left the Indian shores and their assets were transferred to their accounts maintained abroad.
According to Dr. Sujatha Elizabeth Prasad, Chief General Manager-in-Charge of RBI, when such people leave India for a country other than Nepal or Bhutan for employment, business or for any other reasons for an uncertain period, their existing account would now be designated as a Non-Resident Ordinary (NRO) account.
This is being introduced to facilitate the foreign nationals to collect their pending dues in India, she adds.
The account would be closed immediately after all the dues are received and repatriated as per the declaration made by the account holder.
The banks have been directed to repatriate the funds credited to the NRO account immediately to the foreign national after verifying whether the account holder has paid applicable income and other taxes in India.
However, the amount repatriated abroad cannot exceed $1 million in a financial year.
