India relaxes NRI banking guidelines

The Reserve Bank of India (RBI) has relaxed foreign exchange regulations to make it possible for Indian residents to hold joint accounts with relatives holding foreign currency accounts. The amendment to the Foreign Exchange Management Act 2000 also allows close resident relatives of Non-Resident Indians (NRIs) to repay housing and other rupee denominated loans on behalf of NRIs. The RBI announced the changes in a statement posted on its website. Under amended guidelines, NRIs can open either a non-resident external or a foreign currency non-resident (B) account with their resident close relative. The resident close relative is eligible to operate the account as a power of attorney holder in accordance with existing instructions during the lifetime of the non-resident relative. At the same time, NRIs have been allowed to include non-resident close relatives as a joint holders in their resident bank accounts. However, such non-resident Indian close relatives are not allowed to operate the account during the lifetime of the resident account holder.