Home / Business and Economy / Rupee Slide Prompts Banks to Scrutinize Wealthy Indians' Funds
Rupee Slide Prompts Banks to Scrutinize Wealthy Indians' Funds
25 Dec
Summary
- Banks now require CA validation for 'sources of funds' transfers.
- Rupee's slide incentivizes wealthy Indians to move money abroad.
- NRIs can remit $1 million annually after selling Indian assets.
High-street banks are intensifying scrutiny on wealthy Indians and NRIs seeking to transfer funds abroad, prompted by the rupee's recent slide against the US dollar. These institutions are now mandating testimonials on the 'sources of funds,' requiring validation by a chartered accountant, and sometimes specifying CAs from their empanelled list.
This increased oversight comes as individuals are tempted to remit funds overseas, utilizing options like the Liberalised Remittance Scheme (LRS), which allows residents up to $250,000 annually. Non-resident Indians (NRIs) can remit up to $1 million yearly after selling Indian assets. Businesses also face checks on overseas vendor payments.
Banks are reportedly tightening compliance, potentially influenced by recent penalties and appellate tribunal observations emphasizing due diligence under FEMA. The process is particularly complex for NRIs changing residential status, where tracing historical fund sources from savings accounts can be challenging, requiring extensive documentation like salary certificates.
