In last December Reserve Bank of India announced deregulation of interest rate which was paid by banks on external rupee deposits. By following this most of the banks have been offering high rate of interest on NRE account in accordance with rates on domestic term deposits. The result of this deregulatory policy enables the NRIs to earn more on deposits and invest in real estate. A committee headed by K.J. Udeshi which was established for reviewing the policies in the Foreign Exchange Management Act 1999. There are certain provision which have been liberalized by the apex bank this will not only help the Non Resident Indians but will also be helpful to resident Indians.
RBI has permitted NRIs for opening NRE account with a relative based on recommendations and conditions. On the basis of former-or-survivor basis and by fulfilling the formalities account can be opened. Transaction by resident Indian relative can only be made if the person has power of attorney. The problems faced by the NRIs and their relatives will be solved to a great extent by permitting opening of joint account. Earlier even a close relative was not permitted to withdraw money on behalf of the NRI but now it’s possible to do so.
RBI has permitted NRIs for opening NRE account with a relative based on recommendations and conditions. On the basis of former-or-survivor basis and by fulfilling the formalities account can be opened. Transaction by resident Indian relative can only be made if the person has power of attorney. The problems faced by the NRIs and their relatives will be solved to a great extent by permitting opening of joint account. Earlier even a close relative was not permitted to withdraw money on behalf of the NRI but now it’s possible to do so.
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