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The Reserve Bank of India (RBI) on Monday set new know your customer (KYC) rules to facilitate opening of bank accounts for foreign students studying in India.
Banks can open non-resident ordinary (NRO) accounts for foreign students on the basis of their passports after verifying their visa and immigration details, and on production of the admission letter from an educational institution, RBI said in a circular.
However, within 30 days of opening their accounts, the students should submit rent agreements as proof of local residential address. Banks should insist on visit by landlords to branch to verify rent documents. Instead, banks should adopt alternative mechanisms to verify the local address, RBI said.
In case the student is staying in the facility provided by the institution, a letter from the educational institution can also be produced as proof of residence.
However, students of Pakistani nationality will need the prior approval of RBI for opening the account, the central bank said.
Within the 30-day period, there would be cap of $1,000 on foreign remittances and Rs 50,000 on monthly withdrawal.
After submitting the local proof of address, the account would be treated as normal NRO account, RBI said.
The move comes after various banks apprised RBI of the difficulties in opening bank accounts of foreign students in India due to absence of local residential address proof.
