The Reserve Bank of India (“RBI”), in exercise of the powers conferred by Section 6(2) and Section 47(2) of the Foreign Exchange Management Act, 1999, vide Notification No. FEMA5(R)(5)/2025-RB[1], dated January 14, 2025, issued the Foreign Exchange Management (Deposit) (Fifth Amendment) Regulations, 2025, which shall come into force immediately. The recent amendments have introduced key changes to the Foreign Exchange Management (Deposit) Regulations, 2016 (the “Principal Regulations”).
Regulation 5(4) of the Principal Regulations previously allowed any person resident outside India, having business interest in India to open, hold, and maintain a Special Non-Resident Rupee Account (“SNRR Account”), with an authorised dealer in India. The amendments now extend this provision to allow such persons to open, hold, and maintain an SNRR Account, not only with an authorised dealer in India but also with a branch of the authorised dealer located outside India.
Accordingly, Paragraph 1 of Schedule 4 of the Principal Regulations has been amended to reflect this change, now permitting a person resident outside India with business interests in India to open an SNRR Account either with an authorised dealer in India or with its branch outside India.
This SNRR Account may be used for conducting permissible current and capital account transactions with residents of India, in accordance with the relevant rules or regulations. The said SNRR Account may also be used for transactions with non-residents.
Furthermore, the amendments provide that units located in an International Financial Services Centre (“IFSC”), under Section 18 of the Special Economic Zones Act, 2005, may now open an SNRR Account with an authorised dealer in India (outside the IFSC) for the purpose of conducting business-related transactions outside the IFSC.
[1]https://website.rbi.org.in/web/rbi/-/notifications/foreign-exchange-management-deposit-fifth-amendment-regulations-2025