RBI panel recommends for easing FEMA norms

A committee on the Foreign Exchange Management Act (FEMA) set up by the Reserve Bank of India (RBI) has recommended several measures to liberalise the current regime so that the procedural knots in the system can be “untied to enable the present forex liberalisation to be effective”.

The committee, headed by former RBI deputy governor K J Udeshi, proposed that

1) Any resident in India can gift shares, securities or convertible debentures etc. to their NRI/PIO close relative residing outside India for an amount not exceeding the rupee-equivalent of $2,00,000 in a calendar year.

2) To enable hassle-free remittances by resident individuals, it proposed that banks should not insist on any form for remittances under Liberalised Remittance Scheme (LRS).

3) The panel suggested that the ambit of FEMA Notification of May 3, 2000, may be expanded to include permission to residents making gifts to and bearing medical expenses of visiting NRIs/PIOs.

4) It said permission may be granted to resident individuals to acquire qualification shares of an overseas company for holding the post of a director without the existing limitations.

5) It proposed that resident individuals be allowed to include non resident close relatives as defined in the Companies Act as a joint holder in their resident bank accounts.

6) The committee has also recommended that the Portfolio Investment Scheme be discontinued.


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  2. it will take more time...but i will try to now onwards