RBI Eases Rules Allowing NRIs to Open Overseas Rupee Accounts

For instance, an NRI in the US can now open a rupee account with New York branch of an authorized dealer bank in India

- Gopika Gopakumar

Non-residents will now be able to open rupee accounts in the overseas branches of India-registered authorized dealer banks and conduct cross-border transactions in rupees as the central bank eased rules in a move aimed at internationalization of the local currency.

The Reserve Bank of India (RBI), in consultation with the Union government, has undertaken a further review of the existing regulations issued under the Foreign Exchange Management Act 1999 (Fema) "to promote cross-border transactions in INR and local and national currencies," said a statement by the central bank on Thursday.

According to these new guidelines, RBI has allowed overseas branches of authorized dealer (AD) banks to open rupee accounts for non-residents for settlement of all current account and capital account transactions with Indian residents. AD banks are those authorized by the RBI to deal in foreign exchange or foreign securities.