RBI expands the scope of SNRR Account

RBI expands the scope of SNRR Account

• The Reserve Bank of India has expanded the scope of SNRR Account by permitting person resident outside India to open such account.

• Before this, only a person resident outside India, having a business interest in India, was authorised to open a Special Non-Resident Rupee Account (SNRR account) with an authorised dealer for the purpose of putting through bona fide transactions in rupees.

• Now RBI has expanded the scope of SNRR Account by permitting person resident outside India to open such account for:
  • External Commercial Borrowings in INR;
  • Trade Credits in INR;
  • Trade (Export/ Import) Invoicing in INR; and
  • Business related transactions outside International Financial Service Centre (IFSC) by IFSC units at GIFT city like administrative expenses in INR outside IFSC, INR amount from sale of scrap, government incentives in INR, etc. The account will be maintained with bank in India (outside IFSC).

• Also, earlier there was a restriction that No operations are permissible in the account after seven years from the date of opening of the account. Now this restriction of 7 years has been removed.

Points to remember:

1. Full form of SNRR Account.
2. In which four cases now can the SNRR Account be opened?