Whether a foreign National can open (NRO) Non resident Ordinary Rupee Account as per FEMA

[GANESH PAI]

I am refering this case on behalf of one of my friends in Oman. He is presently AGM of one of the local banks here. That bank had a stake in Centurian Bank and at that time the employees of Bank were also given an option to acquire share of Centurian Bank.The person in question is Sudanese National who is having demat account and PAN also. He had requested to open one bank account with a new generation Private Bank in India which refused to open Non resident a/c of Foreign National. The purpose of his opening account is to dispose of his shares and repartiate the proceeds to Sudan for some other investment purpose. My issue is whether a foreign National can open NRO account as per FEMA. Whether he needs to take prior permission from RBI to off load his shares and repatriate the proceeds.

[Rama Krishana]

As per the provisions, Opening of accounts (NRO) by individuals/entities of Bangladesh / Pakistan nationality / ownership requires prior approval of Reserve Bank. - Otherwise no prior permission of RBI is required. - You may refer to FEMA circular dated 1-7-2009 under master circular category - https://www.taxtmi.com/circulars?id=6384

AI Summary

NRO account access by foreign nationals generally allowed; prior approval required only for Bangladesh and Pakistan nationals. Opening a Non Resident Ordinary Rupee (NRO) account by foreign individuals or entities generally does not require prior Reserve Bank approval; however, individuals or entities of Bangladesh or Pakistan nationality or ownership must obtain prior approval. This rule governs account opening and the ability to dispose of shares and repatriate proceeds, as reflected in the FEMA master circular referenced.