The Reserve Bank of India has bestowed the status of Non-Resident Indians under the Foreign Exchange Management Act to Indian students studying abroad.
As NRIs, these students will be eligible for receiving remittances from India up to $100,000 from close relatives on self-declaration towards maintenance.
This could include remittances towards their studies too.
Besides, they can receive up to $1 million out of sale proceeds/balances in their accounts maintained with an authorised dealer (bank) in India in addition to all other facilities available for NRIs under FEMA.
Finally, these students will be allowed to continue the educational and other loans which were availed of by them as residents in India.
The RBI has been receiving representations from Indian students studying abroad requesting that they be treated as Non-Residents under FEMA.
Their argument is that though they are students, they are in reality not dependent for a dominant part of their expenses on remittances from their households in India.
Often they are permitted to work and have to undertake certain related financial transactions. They, therefore, sought a change in the definition.
"Taking into account the definition of resident under FEMA and the intention of the student to stay abroad for an uncertain period though not for permanent settlement, it has been decided to treat them henceforth as NRIs from the FEMA angle," the Reserve Bank of India said.
It has also clarified that these instructions do not dilute in any way the utilisation of the existing foreign exchange remittance facilities to students in regard to their academic pursuits.
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