Notification No. FEMA 5 (R)/(3)/2019-RB
November 13, 2019
Foreign Exchange Management (Deposit) (Third Amendment) Regulations, 2019
In exercise of the powers conferred by clause (f) of sub-section (3) of section 6, sub-section (2) of section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank of India makes the following amendment in the Foreign Exchange Management (Deposit) Regulations, 2016 (Notification No. FEMA 5 (R)/2016-RB dated April 01, 2016) (hereinafter referred to as 'the Principal Regulations'), namely:-
1. Short title and commencement.
(i) These regulations shall be called the Foreign Exchange Management (Deposit)
(Third Amendment) Regulations, 2019.
(ii) They shall come into force with effect from the date of their publication
in the Official Gazette.
2. In the Principal Regulation, in SCHEDULE 4,
(a) for paragraph 1, the following shall be substituted, namely, :-
1. Any person resident outside India, having a business interest in India, may
open Special Non-Resident Rupee Account (SNRR account) with an authorised dealer
for the purpose of putting through bona fide transactions in rupees, not
involving any violation of the provisions of the Act, rules and regulations made
thereunder. The business interest, apart from generic business interest, shall
include the following INR transactions, namely, :-
i. Investments made in India in accordance with Foreign Exchange Management
(Non-debt Instruments) Rules, 2019 dated October 17, 2019 and Foreign Exchange
Management (Debt Instruments) Regulations, 2019 notified vide notification no.
FEMA 396/2019-RB dated October 17, 2019, as applicable, as amended from time to
time;
ii. Import of goods and services in accordance with Section 5 of the Foreign
Exchange Management Act 1999 (42 of 1999), read with Notification No. G.S.R.
381(E) dated May 3, 2000, viz., Foreign Exchange Management (Current Account
Transaction) Rules, 2000, as amended from time to time;
iii. Export of goods and services in accordance with Section 7 of the Foreign
Exchange Management Act 1999 (42 of 1999), read with Notification No. G.S.R.
381(E) dated May 3, 2000, viz., Foreign Exchange Management (Current Account
Transactions) Rules, 2000, as amended from time to time, and further read with
FEMA Notification No.23(R)/2015-RB dated January 12, 2016, as amended from time
to time;
iv. Trade credit transactions and lending under External Commercial Borrowings (ECB)
framework in accordance with Foreign Exchange Management (Borrowing and Lending)
Regulations, 2018, as amended from time to time; and
v. Business related transactions outside International Financial Service Centre
(IFSC) by IFSC units at GIFT city like administrative expenses in INR outside
IFSC, INR amount from sale of scrap, government incentives in INR, etc. The
account will be maintained with bank in India (outside IFSC).
(b) for paragraph 2, the following shall be substituted, namely, :-
2. The SNRR account shall carry the nomenclature of the specific business for
which it is in operation. Indian bank may, at its discretion, maintain separate
SNRR Account for each category of transactions or a single SNRR Account for a
person resident outside India engaged in multiple categories of transactions
provided it is able to identify/ segregate and account them category-wise.
(c) in paragraphs 3,5 and 6, for the word should, the word shall shall be
substituted.
(d) for in paragraph 8, the following shall be substituted, namely, :-
8. The tenure of the SNRR account shall be concurrent to the tenure of the
contract / period of operation / the business of the account holder and in no
case shall exceed seven years. Approval of the Reserve Bank shall be obtained in
cases requiring renewal:
Provided the restriction of seven years shall not be applicable to SNRR accounts
opened for the purposes stated at sub. paragraphs i to v of paragraph 1 of this
schedule.
(e) for paragraph 13, the following shall be substituted, namely, :-
13. The amount due/ payable to non-resident nominee from the account of a
deceased account holder, shall be credited to NRO/NRE account of the nominee
with an authorised dealer/ authorised bank in India or by remittance through
normal banking channels.
(Ajay Kumar Misra)
Chief General Manager-in-Charge
Foot Note: The Principal Regulations were published in the Official
Gazette vide No. G.S.R. 389(E) dated April 01, 2016 and subsequently amended as
under
G.S.R.1093 (E) dated 09.11.2018
G.S.R. 498 (E) dated 16.07.2019
No. FEMA 5(R)/(3)/2019-RB dated November 13, 2019