Demonetisation: rules for NRIs and expats
The Financial Express
Partner, Tax, EY India
The exchange of cash for Indian citizens has been suspended by banks. However, up to December 15, the government has allowed the exchange of foreign currency held by foreign citizens up to Rs 5,000 per week based on a self-declaration that no other withdrawal was made during that week. Further, an entry to this effect will be made in the passport.
The demonetisation move has left foreign citizens, particularly those on business trips, medical, tourism and expatriates working in India, with valueless paper since many of them do not have bank accounts in India. The expats in India can deposit their old currency in their Indian bank accounts by submitting certain documentary evidence as specified by the RBI.
However, the practical challenge comes when expatriates do not have an Indian bank account and withdraw money in India using their international debit/ credit cards. In such cases, the recourse that is available to them is to open a bank account in India quickly to deposit the old currency.
Again, as the new currency notes are yet to be unveiled outside India, non resident Indians (NRIs) may deposit the old currency notes into their NRO account if they are travelling to India before 30 December 2016. Otherwise, such persons may have the old currency deposited in their Indian bank accounts through a representative in India. For doing so, a written authorisation in favour of the representative has to be given. This process, though, could take time considering the logistics for physical handover of the old currency.
After December 30, expatriates/ NRIs may deposit old notes with the RBI and other authorised exchange centres by producing valid identity proofs and self-attested application along with necessary documentation like passport, travel tickets as may be specified by the RBI to prove that the expatriate/ NRI was outside India prior to December 30, 2016.
The government has formed a committee with the minister of external affairs to address concerns expressed by NRIs. For the time being, expatriates may continue to use their international debit/ credit cards to make online payments to the extent possible.
The intention of the government behind demonetisation is to track black money and penalise black money hoarders with the objective of minimising corruption and the use of counterfeit cash. Given the overall objective of the government, a little bit of pain is tolerable since it takes away a lot more pain in the long run.