As the government vouches for the consequences of the demonetisation move announced by Prime Minister Narendra Modi are finally over, analysts remain sure that troubled times still continue. Affecting not only the economy and big/small businesses, banning of high denomination notes really drove a wedge between the people and Modi Sarkar. Rajesh Dhruva, Chartered Accountant advising overseas Indians in matters related to Foreign Exchange Management Act, 1999 (FEMA) and, Chief Executive of Femaonline, sent over a presentation to Reserve Bank of India Governor Urjit Patel citing deposit of demonetised currency by foreign citizens of Indian origin, and deposit of balances retained in India by Indian citizens as also foreign citizens of Indian origin.
The Indian community abroad were amongst those affected by the banning of 500/1000 rupee notes. In a carefully mapped out letter, Dhruva draw attention to several miss outs by the RBI, that he cites has created severe hardships for NRIs. The discreet letter first states that RBI press release- Notification No. RBI/2016-17/205 DCM (Plg) No. 2170 / 10.27.00/2016-17, dated December 31st, grants the facility to exchange SBNs during grace period to just Indian citizens. Them being, resident Indians who were abroad between 9th November to 30th December, and NRIs who were not in the country during the same period. It also adds that resident Indians won't bear restrictions about the amount of deposits, but "NRIs are restricted to tender a maximum of Rs 25,000 subject to production of Indian Customs certificate of import of SBNs."
Drawing out the variations in the notification, Dhruva points out that "Foreign Citizen of Indian Origin i.e. Person of Indian Origin (PIOs) who are also NRIs are not granted the facility and are eliminated in total." He added, "There are a large number of NRIs who have adopted Foreign Citizenship and the entire class of these Foreign citizen NRIs are excluded from this facility which is restricted only to NRIs who are Indian Citizens. For sure, this seems to be a drafting error and not the intention of the Reserve Bank of India nor the Government of India." Dhruva also brings to attention, the bias in issuing a restriction on the maximum amount of deposit. "Whereas resident individuals are granted facility to deposit any amount of SBNs, NRIs are restricted to deposit maximum amount of Rs 25,000. This restriction seems to be based on the assumption of SBNs being carried out of India and brought back in India as a condition is also laid down about certificate of Customs Authorities for import and subsequent deposit of SBNs up to Rs 25,000 as FEMA Regulations permit an individual to carry a maximum of Rs 25,000 only out of India.
Offering a set of suggestions, Dhruva stated, "No doubt by virtue of A.P. (DIR Series) Circular No. 24 of 3rd January 2017 extension has been granted to Foreign Citizens to exchange SBNs up to Rs. 5,000/- per week up to 31st January 2017 which will squarely include Foreign Citizens of Indian Origin but as that would not allow import of SBNs by Foreign Citizen NRIs, Reserve Bank of India should allow up to 30th June 2017." Also said that "Foreign citizens of Indian origin NRIs should be recognised at par with Indian Citizen NRIs as regards to deposit of SBNs up to 30th June 2017."
