RBI enhances scope of Special Non-Resident Rupee accounts
The Reserve Bank of India (RBI) has enhanced scope of ‘Special Non-resident Rupee’ (SNRR) by allowing persons residing outside India to open such accounts for purposes such as- (a) external commercial borrowing (ECB), (b) trade credit and and (c) Trade (Export/ Import) Invoicing, in domestic currency. The step is taken to popularise cross-border transactions in Indian rupee (INR).
Key Highlights
Objective: The step is taken with a view to promote usage of INR products by persons’ resident outside India. Other reasons for allowing such move includes export/ import invoicing and business related transactions outside International Financial Service Centre, all in domestic currency of INR.
The apex bank, RBI in consultation with Government of India has been decided to expand the scope of SNRR Account by permitting non-residents to open such accounts for rupee denominated overseas borrowings and trade credit/ invoicing for popularising cross-border transactions in domestic currency.
Any person resident outside India, having a business interest in India, can open a non-interest bearing SNRR account with a bank for bona fide transactions in INR. In addition to this, the RBI, in consultation with government has decided to rationalise certain other provisions for SNRR Account such as removing the restriction on tenure of SNRR account (which is currently 7 years) has for purposes given above.
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Month: Current Affairs - November, 2019