What can NRIs do with their old Rs500, Rs1,000 notes?
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For the non-resident Indians (NRIs) who keep Indian currency, the move to demonetize Rs500 and Rs1,000 notes may spell hardships. As per the clarification issued by the Reserve Bank of India, the recourse for an NRI is to deposit the specified bank notes (Rs500 and Rs1,000) to his non-resident ordinary rupee (NRO) account. “But what happens if the person doesn’t have the bank branch in her country of residence? And more importantly will the foreign branch accept rupee notes? These are some questions that NRIs will struggle with,”said Gautam Nayak, a chartered accountant. “Also an NRI can’t keep more than Rs25,000 in currency so that also needs to be kept in mind,” he added. According to Jose K. Matthew, head-retail business, Federal Bank Ltd; an NRI cannnot deposit cash in NRO account from a foreign country.
This, of course, has some NRIs worried. Praveen Gairola, an IT professional based in San Jose, California, likes to keep some Indian currency notes for comfort. “Normally, we keep about Rs5,000 in cash so that when we go back to India we have some ready currency. This time around we have Rs15,000 mostly in the denomination of Rs500. I would like to deposit the money but I don’t have an NRO account. I only have a non-resident external (NRE) account,” he said.
According to Sonu Iyer, tax partner and people advisory services leader, EY India, opening an NRO account shouldn’t be a problem for NRE account holders.
For the NRIs this is going to be a tricky situation. According to Mathew, the recourse will be to deposit the money once back in India. “Normally, people don’t carry Indian currency abroad. However, in case they have Indian currency notes (Rs500 and Rs1,000 notes) with them, they will have to deposit money once they are back in India. Else, they can send it to relatives or friends and ask them you deposit on behalf of them,” he said. Federal Bank currently has over 2 million NRI customers. However, if you are a foreign tourist in India, you can purchase foreign exchange equivalent to Rs5,000 using these high denomination notes at airport exchange counters within 72 hours after the notification (till 11 November), with proof of purchasing these notes.