On Thursday, the RBI relaxed foreign exchange management regulations for opening of accounts by FPIs and and foreign venture capital investors (FVCIs), and opening of non-resident ordinary (NRO) account by long-term visa (LTV) holders.
In respect of the development, the RBI said that banks which have an authorization to deal in forex can allow SEBI-registered FPI and FVCI to open as well as maintain a foreign-currency account, which is non-interest bearing, for making investments.
Also, for the natives of Pakistan or Bangladesh,particulary those belonging to minority community such as Hindus, Sikhs, Buddhists, Jains, Parsis and Christians, residing in India and who has been granted a long-term visa (LTV) by the Central government, these banks are allowed to open a single NRO or non-resident ordinary account. The account will be converted to a resident account once such a person becomes a citizen of India.
"This account can also be opened if such person has applied for LTV, which is under consideration of the Central government, in which case, the account will be opened for a period of six months and may be renewed at six monthly intervals subject to the condition that the individual holds a valid visa and valid residential permit issued by the foreigner registration office (FRO)/ foreigner regional registration office (FRRO) concerned," the central bank said in a notification.
Also, for the opening of such an NRO account, there will be needed a reporting by the concerned bank for the details of the accounts opened to the ministry of Home affairs on a quarter-on-quarter basis.