Page 47 - Banking Finance July 2021

ARTICLE

Particulars NRE Account FCNR (B) Account NRO Account
PIOs are remittable up to USD 1 (one)
million per financial year (April-March)
along with their other eligible assets.
Taxability Income earned in the accounts is exempt from Taxable
income tax and balances exempt from wealth tax
Loans in India Authorised Dealer can sanction loans in India to Loans against the deposits can be
the account holder/ third parties without any limit, granted in India to the account holder
subject to usual margin requirements. These loans or third-party subject to usual norms
cannot be repatriated outside India and can be margin requirement. The loan amount
used in India only for the purposes specified in cannot be used for relending, carrying
the regulations. on agricultural/ plantation activities or
investment in real estate.

Double Taxation Avoidance Agreement Banks may ask for more documents as well depending
upon case to case basis.
(DTAA):
DTAA is an agreement between two countries to facilitate Win-win situation for all the
the person to avoid double tax on the same declared asset
in two different countries. Under the current DTAA stakeholders:
provisions an NRI customer can enjoy reduced rate of tax NRI accounts, if used appropriately,provides a win-win
on interest earned in NRO rupee deposits in India. Main situation for NRIs, Banks and country as a whole.
document that is required to take benefit under this
NRIs gets higher rate of interest, exemption from Income
agreement is Tax Residency Certificate(TRC) along with
tax, stability of their funds, benefits of diversification etc.
some other documents.
are among various other benefits.Benefits for banks include
higher CASA and Term deposits, more fee-based income, low
Documents required for NRI accounts: servicing cost etc.For country as a whole, NRIs are one of

Y Application form the main generators of foreign exchange.
Y Passport copies of different pages in passport.
Sources:
Y Proof to show intention of living in abroad for uncertain 1. www.rbi.org.in
period e.g., Employment letter, work permits, student 2. https://en.wikipedia.org
visa, residence visa or any other documents. 3. www.cleartax.in
Y Though above documents are standard documents. 4. www.unionbankofindia.co.in. T

MotilalOswal Mutual Fund splits NASDAQ 100 ETF in 1:10 ratio

MotilalOswal Asset Management Company Limited has announced a split in the face value of each unit of MotilalOswal
NASDAQ 100 ETF in a 1: 10 ratio. Consequently, the balance unit holding of existing unit holders under the Scheme as
per records of the depositories as on 18 June, 2021, will increase proportionately. However, this will not have any
impact on the current value of holdings of the unit holders of the scheme.
"At MotilalOswal AMC, it is our constant endeavor to offer easy access to innovative products at low cost. The split
will result in MotilalOswal NASDAQ 100 ETF trading at 1/10th price from the open on 17 June 2021. This would encourage
small investors to take exposure to international equities." said Navin Agarwal, MD & CEO of MotilalOswal Asset
Management Company Ltd.

BANKING FINANCE | JULY | 2021 | 47