Resident Bank account maintained by residents in India – Joint holder – liberalization
RBI/2013-2014/437
A.P. (DIR Series) Circular No. 87
A.P. (DIR Series) Circular No. 87
January 9, 2014
ToAll Banks Authorised to deal in Foreign Exchange
Madam/Sir,
Resident Bank account maintained by residents in India –
Joint holder – liberalization
Joint holder – liberalization
Attention of Authorised Dealer (AD) banks is invited to A.P.(DIR Series) Circular No.12 dated September 15, 2011
in terms of which individuals resident in India were permitted to
include non-resident close relative(s) (relatives 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. Such non-resident
Indian close relatives are however not eligible to operate the account
during the life time of the resident account holder in terms of said
instructions.
2. Reserve Bank has received representations that for
operational convenience the Non-Resident Indians (NRIs), as defined in
Regulation 2(vi) of FEMA Notification No.5 dated May 3, 2000, may be
permitted to operate such accounts on “Either or Survivor” basis.
Accordingly, on a review, it has been decided that AD banks may include
an NRI close relative (relatives as defined in Section 6 of the
Companies Act, 1956) in existing / new resident bank accounts as joint
holder with the resident account holder on “Either or Survivor” basis
subject to the following conditions:
-
Such account will be treated as resident bank account for
all purposes and all regulations applicable to a resident bank account
shall be applicable.
-
Cheques, instruments, remittances, cash, card or any other
proceeds belonging to the NRI close relative shall not be eligible for
credit to this account.
-
The NRI close relative shall operate such account only for
and on behalf of the resident for domestic payment and not for creating
any beneficial interest for himself.
-
Where the NRI close relative becomes a joint holder with
more than one resident in such account, such NRI close relative should
be the close relative of all the resident bank account holders.
-
Where due to any eventuality, the non-resident account
holder becomes the survivor of such an account, it shall be categorized
as Non-Resident Ordinary Rupee (NRO) account as per the extant
regulations.
-
Onus will be on the non-resident account holder to keep AD
bank informed to get the account categorized as NRO account and all
such regulations as applicable to NRO account shall be applicable.
-
The above joint account holder facility may be extended to all types of resident accounts including savings bank account.
4. While extending this facility the AD bank should satisfy
itself about the actual need for such a facility and also obtain the
following declaration duly signed by the non-resident account holder:
“I am the joint account holder of SB/FD/RD/Current Account
bearing No ……. which stands in my name and in the name of Shri/Smt.
……….. who is my ………. (state relationship). I hereby undertake that I
shall not use the proceeds lying in the above account for any
transaction in contravention of the provisions of the Foreign Exchange
Management Act (FEMA) 1999, Rules/Regulations made thereunder and the
related circulars/instructions issued by the Reserve Bank from time to
time. I further undertake that if any such transaction is put through
the said account in contravention of the FEMA, 1999 or
Rules/Regulations made thereunder, I shall be held responsible for the
same. I shall intimate my bank in the event of any change in my
Non-resident / Resident status.”
5. Authorised Dealer Category – I banks may bring the contents
of this circular to the notice of their constituents and customers
concerned.
6. The directions contained in this circular have been issued
under Section 10(4) and Section 11(1) of the FEMA, 1999 (42 of 1999)
and are without prejudice to permissions/approvals, if any, required
under any other law.
Yours faithfully,
(Rudra Narayan Kar)
Chief General Manager In-Charge
Chief General Manager In-Charge
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