In order to facilitate participation by Non-resident Indians (NRIs)/Persons of Indian Origins (PIOs) in India's economic development, over a period of time, the Government of India and the Reserve Bank of India have provided a number of special facilities to them. Procedures for availing of such facilities have also been simplified from time to time. As a result, the requirement for NRIs to apply and seek specific permission from the Reserve Bank for each financial transaction or investment has also been reduced considerably. Thus, the Reserve Bank has already granted general permission to NRIs/PIOs, for undertaking direct investments in Indian companies, purchase of shares under Portfolio Investment Scheme, investment in companies and proprietorship/partnership concerns on non-repatriation basis and for remittances of current income. NRIs/PIOs do not have to seek specific permission for approved activities under these schemes.

The Reserve Bank of India has now decided to carry this process forward, and to further simplify financial transactions by NRIs/PIOs as indicated below. After these changes have become effective, NRIs/PIOs will be able to undertake most financial transactions, under approved schemes announced by the Government/Reserve Bank from time to time with the same ease as residents in India. The changes are :

1. Facility of opening of Non-Resident(Special)
   Rupee Accounts with banks in India

NRIs/PIOs presently have the facility of maintaining bank accounts and undertaking financial transactions in India subject to certain exchange control regulations.

In order to simplify the procedures and to provide greater freedom to NRIs/PIOs for putting through financial transactions in India it has been decided to permit them to open bank accounts in India which will be at par with rupee accounts maintained by residents. They will now be permitted to open Non-Resident (Special) Rupee Accounts with banks in India which will have the same facilities and restrictions as are applicable to rupee accounts maintained in India by residents in regard to repatriation of funds held in these accounts and/or income/interest earned on them. The procedure for opening such accounts will be the same as in the case of domestic accounts of resident individuals. This scheme will become effective from April 15, 1999. The existing facilities for NRIs/PIOs to maintain and operate Non-Resident (Ordinary) i.e., NRO account, Non-Resident (External) i.e. NRE account and Foreign Currency Non-Resident, i.e., FCNR account will also continue. The repatriation facilities available under these accounts will continue as before.

2. To facilitate various other transactions by
   NRIs/PIOs the Reserve Bank has granted general
   permissions to :

The Reserve Bank will grant general permission to NRIs/PIOs/OCBs to invest in Government Securities and treasury bills while granting permission for investment in shares and debentures under the portfolio scheme.

Taking into account the facilities that are already available, and the above new measures, NRIs/PIOs will not have to seek specific permission of the Reserve Bank for a whole variety of approved financial/investment transactions. This should considerably reduce paper work and time taken for undertaking such transactions.

After the above changes come into effect, the areas in which facilities available to NRIs/PIOs/OCBs will not be the same as available to domestic residents, will primarily relate to investment by them in real estate/agriculture and plantation business.