reserve Bank of India (RBI) on Thursday issued some important instructions regarding deposits and accounts. These instructions have been issued for banks. Under these latest instructions issued by the Indian Reserve, banks will get relief in some cases and in some cases they will now have to get approval from the central bank. RBI has said that banks can now open or close the rupee account (interest -free) in the name of their foreign branches or representatives and they will not need to inform the central bank for this.
In such cases it is necessary to get approval from the Reserve Bank of India
However, the Reserve Bank of India said in the ‘Master’ directive issued on the deposit and account that it would be very important to get special approval from the Reserve Bank to open the rupee accounts in the name of branches of Pakistani banks operating outside Pakistan. It states that depositing in the account of a migrant bank is an approved method of payment to migrants and hence, it is subject to the rules applied to transfer in foreign currency. The RBI said that withdrawal from a migrant bank account is actually a remittance of foreign currency.
Banks can buy foreign currency independently at current market rates
On funding the accounts of migrant banks, the Reserve Bank said that banks can buy foreign currency independently from their foreign representatives/branches to keep the amount in their accounts to meet their real needs in India. However, the transactions in the accounts should be strictly monitored to ensure that foreign banks do not adopt a betting view on Indian rupees. Any such case should be reported to the Reserve Bank.
With PTI inputs
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