This, in effect, puts NRIs/persons of Indian origin (PIO) on a par with resident Indians. The move is likely to bolster the foreign currency reserves of the country which has touched a record $31 billion on March 19. The new account seeks to simplify NRI transactions and is yet another attempt to woo the non-resident Indians after the phenomenal success of the Resurgent India Bonds which had raked in $4.2 billion in August 1998.

In order to facilitate various other transactions by NRIs/PIOs, the RBI has granted general permissions to resident individuals, partners/proprietorship concerns to avail of interest-bearing rupee loans from NRIs/PIO out of funds remmitted by them from abroador out of funds held in their bank accounts on non-repatriation basis. This is, however, subject to certain conditions-- one of them being that the rate of interest on such loans should not exceed bank rate plus two percentage points.

An Reserve Bank release said that it will grant general permission to NRIs/PIOs/OCBs to invest in government securities and treasury bills. It has granted permission to them to invest in shares and debentures under the portfolio scheme.

The central bank said that the procedure for opening the NRSR account will be the same as in the case of domestic accounts of resident individuals. "The scheme will become effective from April 15, 1999. The existing facilities for NRIs/PIOs to maintain and operate non resident-ordinary (NRO), non resident-external (NRE) and foreign currency non resident account (FCNR) will continue. The repatriation facilities available under these accounts will continue," the release said.

The RBI has also granted general permission to NRIs/PIOs totransfer--by way of gift--shares held by them in Indian companies. The PIOs have been allowed to transfer--by way of gift--immovable propoerty held by them in India to registered charitable trusts/organisations, subject to compliance with other applicable rules including provisions of Foreign Contributoin Regulation Act, 1976, by the chartibale trusts.

General permision has also been granted to them for investment on repatriation basis in air taxi operations subject to the approval of the director general of civial aviation.

It has also granted permission to all domestic public/private sector mutual funds for issue of units to NRIs/PIOs/OCBs on both repatriation as well as non-repatriation basis. NRIs have also been permitted to place deposits with Indian firms on a non-repatriation basis and with Indian companies including non-banking financial conmpanies in both repatriation as well as non-repatriation basis.

The central bank has also decided to give general permission to NRIs for sale of sharesacquired under direct investment schemes on stock exchnages in India.

Carry on liberalisation