RBI’s new portal to make life easier for NRIs, Indian corporates
The launch of PRAVAAH portal has opened a direct digital interface with the Reserve Bank of India (RBI) for seeking a host of approvals under the Foreign Exchange Management Act (FEMA).
Until now, all communication for FEMA approvals had to be routed through authorised dealer (AD) banks, which follow their own internal due diligence measures, often making the process complex and time-consuming. There could also be favouritism shown to bigger clients.
“The portal is expected to considerably reduce the overall processing time for FEMA applications filed by non-resident Indians (NRIs), foreign entities and Indian corporates,” said Harshal Bhuta, Partner, PR Bhuta and Co.
NRI applications could involve cases such as sale of inadvertently acquired agricultural land in India; remittance outside India out of inheritance of more than $1 million in a financial year; receipt of gift of immovable property from ageing grandparents in India and credit of sale proceeds in non-resident (external) bank account from sale of more than two house properties to meet liquidity needs outside India, said Bhuta.
Foreign entities and Indian corporates that seek RBI approval for opening more than one bank account for branch offices in India; prepayment of external commercial borrowings to foreign lenders by Indian companies and remittance by Indian companies beyond stipulated limits for maintenance of foreign branches will also benefit.
“Foreign companies can apply for direct approval for expansion of branch activities and diversion of funds from one project office to another in case of intermittent stoppage of any project for a specified duration. Foreign citizens from certain neighbouring countries who have settled in India can apply to RBI for permission to acquire immovable property in India,” said Ashish Karundia, Founder, Ashish Karundia and Co.
The PRAVAAH portal currently encompasses 60 application forms where RBI approval or license is required. “It will be interesting to see the usage of general purpose applications that are not covered under any other specific application format provided on the portal and to note what sort of ‘requests’ are entertained by the regulator,” said Ashish Sodhani, Partner, Parakram Legal.
The Finance Minister in her 2023 Budget speech had appealed to the financial regulators to enhance the efficiency of regulatory processes. The digitisation of the reporting process, delegation of powers to AD banks for various FEMA-related matters and prescribed timelines for processing forms were all steps in this direction.