RBI Eases Rupee Account Rules for Overseas Branches

The Reserve Bank of India (RBI) announced that banks are now allowed to manage rupee accounts for their overseas branches and correspondents without pre-approvals. However, Pakistani bank branches require specific permission. Transactions must comply with foreign currency regulations and be carefully monitored to prevent speculation on the Indian Rupee.

The Reserve Bank of India (RBI) has allowed banks to open and close non-interest-bearing rupee accounts in the name of their overseas branches or correspondents without needing prior approval from the central bank.

Trading guidelines differ for branches of Pakistani banks operating outside Pakistan, which require explicit permission from the RBI as detailed in the updated Master Direction - Deposits and Accounts.

Banks can freely buy foreign currency from their overseas branches to fund these accounts, provided transactions are monitored. The RBI prohibits any forward purchase or sale of foreign currencies against the rupee to non-resident banks.

(With inputs from agencies.)