Recorded RBI impact
Business restriction
Business restriction · Fresh imposition
Published by RBI
24 Apr 2004
Case Brief
The Reserve Bank of India revised its instructions to disallow entities other than authorised dealers or authorised banks from accepting deposits from Non-Resident Indians (NRIs) through fresh remittances from overseas. These entities are also not permitted to accept deposits from NRIs by debit to their NRE/FCNR(B) accounts. The circular clarifies that existing deposits may continue to be held and renewed, and that the interest on such deposits remains repatriable. The revised instructions take effect immediately.
Why RBI Acted
The RBI revised its instructions to prohibit entities other than authorised dealers or authorised banks from accepting deposits from Non-Resident Indians (NRIs) when the funds come through fresh remittances from overseas. Such entities are also barred from accepting NRI deposits by debit to NRE or FCNR(B) accounts. The release notes that existing deposits may continue to be held and renewed, and that the change applies immediately.
Operating Impact
Affected entities must stop onboarding fresh NRI deposits funded by overseas remittances or by debits to NRE/FCNR(B) accounts. They may continue servicing existing NRI deposits and renewals, while authorised dealers/banks must inform their constituents of the revised rule.
Action Facts
- Primary Impact
- Business restriction
- Effective From
- 1 Apr 2003
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Other