NRIs real estate gains unlocked
Immediately after they sell their immovable properties abroad, NRIs can remit money up to $1mn/year.
By Team ET, TNN |
Non-resident Indians (NRIs) have got a shot in the arm from RBI. They are now allowed to remit money up to $1m per year immediately after they sell their immovable properties abroad.
So far, NRIs and persons of Indian origin (PIOs) were necessarily needed to lock-in their sale proceeds of immovable property for a certain period in their non-resident ordinary (NRO) accounts. Now, RBI has removed the lock-in period norm.
However, the annual ceiling on total remittances out of NRO accounts will remain static at $1m. Amounts credited to NRO accounts will also represent sale proceeds of immovable property as acquired by NRIs out of their resources in India, or proceeds of property received by way of inheritance or gift.
Overall, RBI intends to enhance the scope of banks’ remittances business. Particularly, it has mentioned that public sector banks should take up remittances business as “an independent business segment and resort to latest technology for handling large volumes at lower cost and explore tie-ups with more correspondent banks”.
Not surprisingly, RBI has proposed to dispense with the existing restrictions on the number of tie-ups by banks with exchange houses and the number of drawee branches for rupee drawing arrangements. It has also said that large PSBs in India need to examine the feasibility of setting up ‘centralised remittance receiving centres’ to offer better service and to improve and extend the scope of real time gross settlement (RTGS) for inter-city settlement between banks in India.
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In other words, the central bank plans to offer NRIs a perfect market for remitting money to India. RBI proposals are based on an internal report on NRI remittances. It also said that NRIs need to be sensitised on options to minimise cost of remittances, to review the existing scale of charges both at foreign and domestic ends. Download
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