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

Sudanese National Can Open NRO Account in India Without RBI Approval Under FEMA, Except for Bangladesh or Pakistan Nationals. A foreign national, specifically a Sudanese individual with a demat account and PAN, sought to open a Non-Resident Ordinary (NRO) Rupee Account in India to sell shares and repatriate the proceeds to Sudan. A private bank in India refused to open the account. The query was whether prior permission from the Reserve Bank of India (RBI) is necessary under the Foreign Exchange Management Act (FEMA). The response clarified that prior RBI approval is required only for individuals/entities from Bangladesh or Pakistan; otherwise, no permission is needed. Reference was made to a FEMA circular dated July 1, 2009.