Rupee at lifetime low against the $











The falling rupee has given FII inflows in India the shiver; however Indians abroad (NRIs) are making the most of it.
Rupee on Monday slipped to a lifetime low of 57.33 vs dollar. Dropping to a record low in early trade, this comes after disappointing data from India and other Asian giants like China and slightly better-than-expected US jobs data.

Speculations now rise for a possible intervention by RBI

Pravasi Bharatiya Divas (PBD) Convention- Kochi 7th January 2013

The eleventh edition of the Pravasi Bharatiya Divas (PBD) Convention, the flagship event of The Ministry of Overseas Indian Affairs, will be held in Kochi, Kerala, on 7-9 January, 2013. The Government of Kerala will be the State partner of this event.

The day commemorates the return of Mahatma Gandhi from South Africa.The Pravasi Bharatiya Divas is celebrated every year to cherish the contributions of the Overseas Indian Community to the development of India.

The PBD Convention provides a unique platform for overseas Indians to interact among themselves and with the Government of India and the Governments of various Indian States. It is a forum where the Government of India showcases investment opportunities in India and its potential in various sectors.

In the forthcoming PBD, numerous enthusiastic participation is expected from heterogeneous and diverse overseas Indian community spread across the globe. The effort is to have a meaningful and interactive event that would address the issues and concerns of the overseas Indian community effectively.

The great Indian Diaspora embodies the indomitable spirit of enterprise, harmony and patriotism for the land of their origin. The enthusiastic participation in the Pravasi Bharatiya Divas over the years since 2003, and the eagerness to connect with the homeland, express the emotional bonds that all Non Resident Indians so fondly share with their motherland. The commercial capital of Kerala awaits to enchant everyone with its natural beauty of backwaters, and mesmerizing monuments of God’s Own Country.

Indians lead the race of tech entrepreneurship in US

More and more Indians entrepreneurs are the faces behind a growing number of US tech startups. A study by the US based Kauffman Foundation shows that 33.2% of the co-founders of engineering and technology firms founded by immigrants in the US since 2006 were Indians. The next came the Chinese, at 8.1%.

Another study done in 2007 for the period 1995 to 2005 had found that Indians accounted for 26% of the co-founders during that period. So there’s been a 7 % increase in the Indian contribution in the post-2005 period. In fact, the Indian immigrant contribution was the only one that increased; most other immigrant communities saw a decline in their contributions, leading to a general stagnation in immigrant entrepreneurship in the US.

An interesting fact is “The Bay Area which has only six million people resides half a million Indians. And among those Indians, 72% work in the tech sector. Of the total tech firms that get funded in the US, 50% are in Silicon Valley. Not surprising that Indians are becoming founders or co-founders.

Diesel price move – An act of cruelty or an act of positive reforms

After raising subsidized diesel prices despite heavy political opposition, the government has taken a positive step forward towards reforms. However this does not come without strong opposition protest along with nationwide unrest on the ever increasing cost of fuel.

Experts say ‘It is a bold move, and will send a strong signal to the Reserve Bank of India on the government’s efforts at fiscal consolidation’

However a leading partner in the ruling coalition has announced a protest march over the weekend and the main opposition party called the move “financial terror”.

It for one to see if the move indeed is a step forward towards reforms or adding further burden to the masses.

Remit2India’s Money on Referral (MOR) program

Remit2India’s Money on Referral program (MOR) just got BIGGER!

All one has to do is refer his/her NRI friend and he/she can earn Rs.1,000/- per referral. Your friends also get Rs. 500/- for using Remit2India services. And the good part is one can refer as many NRI friends as possible. So what are you waiting for? Start referring now and earn unlimited benefits!

The customer also has the choice to redeem this as extra money sent as remittance or even as a Gift Voucher against a host of gifting items from a special catalog.

So, spread the word with Remit2India’s unique referral program ‘MOR’.

Remit2India The Light of India Awards 2012 comes to your television

Remit2India the pioneer in online money transfer service to India has, over the past 11 years strived to offer its customer a simple, trusted and secure money transfer service.

Today we take pride of having over a million happy customers and strive in making our services better every day.

‘Remit2India The Light of India Awards’, our humble initiative introduced last year to thank the people that have helped shape the image of India around the world, witnessed another stupendous gathering this year. Arguably one of the largest gatherings of eminent Indians abroad under one roof.

Global Indians such as Arun Sarin (ex-CEO Vodafone), Lisa Ray (Model & Actress), Sabeer Bhatia (founder hotmail), Padma Lakshmi (Model, host & actress) and many more graced the occasion with their presence.

Catch them receiving the awards on SONY 18th August 2012 at 6:30 PM (local time) on your television sets.

Positive sign for times to come: Indians in Olympics

The Indian contingent is steadily making inroads at the ongoing London Olympics. The first medal came in the form of Gagan Narang winning the Olympic Bronze Medal in the Men’s 10m Air Rifle Event couple of days back.

While tennis and hockey have disappointed, hopes are alive with boxers, shooters and shuttlers (Both Sania Nehwal and Parupalli Kashyap have advanced).

Back home a billion people wait to see their heroes perform well and win more medals. In the true spirit of the game it’s overwhelming to see the interest of people in India growing for sports beyond cricket, a positive sign for times to come.

Let’s hope India wins more medals and keeps its spirits high.

Taxation on NRI accounts

There are different types of bank accounts that are used by Non Resident Indians (NRI) and the two most common ones are the Non Resident Ordinary (NRO) and the Non Resident External (NRE) bank account.
There are different ways in which the money can be handled in these accounts in terms of the repatriation of the amounts and there is also a tax angle that will have to be considered for the individual non resident when they earn income from these account. With several changes recently with respect to these accounts it is important to take a close look at the position.

Nature of account
The NRO savings bank account is a rupee account usually consisting of money earned in India before or after becoming a NRI. A specified amount is repatriable abroad from this account for specific purposes. This is the reason why most of the income that is earned in India can be put here. On the other hand the NRE savings bank account is meant for fund that would be repatriated and hence the amount of the contribution to the bank account also comes from outside earnings in foreign exchange.
The principal as well as interest on the account is repatriable. This account is also present in rupees so there is a currency risk that is present at the time of transfer of money. There are two types of accounts where the amounts can be invested and the first one is the savings account mentioned above. Further the investor can also ensure that there are fixed deposits that can be put with the bank so these will offer an additional investment opportunity for the individual Non Resident Indian.

Interest rate changes
One of the major changes that have been witnessed in the account in recent times is that the interest rate on the NRE fixed deposits has been decontrolled. This means that the banks are free to price the deposits as they deem fit and the immediate impact of this has been that the rates have shot up to over 9% in most cases. This is a significant rise for the investor and they will be able to ensure that there is a good return that they are getting on their investment. While there is this kind of benefit that is present a need is also present to take a careful look at how the taxation will work out.

Tax free
What will come as a bonanza for the non resident investors is the fact that the income earned in the form of interest from the NRE accounts are tax free in their hands. There is no taxation on the interest that is earned here and for this reason there will also not be any Tax Deducted at Source (TDS) on the income earned here. This is a good thing because the individual will be free to ensure that they are investing what they want into the deposits and there is no tax element that they have to worry about.
This reduces the situation of having to claim back amounts from the government as refunds after filing the tax return. The interest earned on the savings bank NRE account as well as the fixed deposit NRE account will be tax free for the investor.
On the other hand when it comes to the NRO account the amount that is earned here is taxable. So the first thing that the NRI has to plan for is the fact that any income from such accounts will have to be included in the tax working. In many cases the fact that the income is taxable might not be such a major point because the total income earned by the NRI and taxable in India might not be very high so they might not have to pay tax.

However there will be a TDS that is done on the account and hence there could be a situation where the NRI will have to go and get a refund of the amount that they have faced as a deduction from the government. This will be done only when they file a return with the necessary details and the amount will be refunded back to them.

Banks flush with NRI deposits

With the rupee trading above Rs 50 against the dollar, remittances from non-resident Indians are surging. In October, the local currency was trading at around Rs 45. Banks like Kotak Mahindra Bank is witnessing a 40-50% y-o-y growth in remittances, while other smaller banks are seeing their NRI deposits growing by 10-30%. The spike in remittances is also partially attributed to the financial crisis in Europe and political unrest in West Asia.

With the rupee breaching the 50-mark, deposits in dollar accounts such as foreign currency non resident account bank schemes (FCNR) (B) have earned an annualized 40% return. To make it sweeter, such accounts can now be held in freely convertible currency. Currently, currencies designated by the Reserve Bank include dollar, pound sterling, yen, euro, Canadian dollar and Australian dollar.

Kerala-based banks have been the biggest beneficiaries of the remittance windfall. Nearly 21% of the deposit base of Federal Bank is accounted by NRIs. For the second quarter, the bank has seen a 30% growth in NRE (non resident external rupee account) and FCNR accounts. “Nearly 7% of pan Indian remittances come through our bank and the rupee weakening has given a further boost,” says A Surendran, head, international banking, Federal Bank. The bank is expecting a 30% growth in its non resident business this fiscal.
Similarly, the non-resident deposit business of South Indian Bank has grown by 20% for the half year ended September 2011. To top that, many Indian banks had offered a 9% deposit schemes at the beginning of the year and with NRO (non resident ordinary rupee account) rates pegged to domestic rates, banks saw a heavy flows into such accounts. For instance, Tamil Nadu’s Karur Vysya Bank has seen a 12% growth in its NRO deposits quarter-on-quarter this fiscal. “NRIs are resorting to arbitrage on account of a weaker rupee and better interest rates on deposits in India when compared to banks abroad,” says N Venkataraman, managing director and chief executive officer, Karur Vysya Bank.

Importantly, the role of NRIs in the Indian banking system has widened. “They are looking at multiple benefits and not just windfalls from exchange rate fluctuations. This includes opportunities for investment in real estate and mutual funds,” says Praveen Kutty, head, retail and SME banking, Development Credit Bank. DCB has seen a growth of 20% in non-resident deposits q-o-q this fiscal and nearly 10% of the retail deposit base of the bank is accounted by Indians abroad. To cash in on such investment opportunities, South Indian Bank has launched portfolio management services for NRIs in association with Geojit BNP Paribas.

“Unlike the previous generation, many of the present generation living abroad are looking to return to India at some point. They are making investments in apartments and so nearly 50-60% of their savings gets channelized to India,” says N Kamakodi, chairman and managing director, City Union Bank.

It’s also profitable to have NRI customers as the average balance maintained by such customers in savings bank and term deposits is much higher than their domestic counterparts. While average balances in CASA of Indian account holders are Rs 35,000, NRIs tend to park over Rs 1 lakh in NRO and NRE savings accounts.

Source:The Times of India

Advantage for NRIs

The Reserve Bank on Wednesday said Indians who have non-resident accounts in the country can now hold them in any currency which is fully convertible.

The move is likely to help NRIs/Persons of India Origin as it will give them more options in the holding of accounts, and lessen the risk from fluctuations in major currencies.

Earlier, FCNR(B) account holders were allowed to hold accounts in only certain currencies such as the Pound Sterling, US dollar, Japanese yen, euro, Canadian dollar and Australian dollar.

“…it has been decided that Authorised Dealer banks in India may be permitted to accept Foreign Currency (Non-Resident) Account (Banks) deposits in any permitted currency.

It may be noted that ‘Permitted currency’ for this purpose would mean a foreign currency which is freely convertible,” RBI said in a notification.“The Committee to Review the Facilities for Individuals under Foreign Exchange Management Act, 1999 in its Report has recommended that FCNR(B) accounts may be permitted to be opened in any freely convertible currency,” RBI said.

RBI also said that any citizen who was earlier residing in a foreign country can own or transfer property or other assets in that nation if it was acquired during the time of his residence there.

“… a person resident in India is free to hold, own, transfer or invest in foreign currency, foreign security or any immovable property situated outside India if such currency, security or property was acquired, held or owned by such person when he was resident outside India or inherited from a person who was resident outside India,” RBI said.In a clarification issued by it regarding repatriation of income and sale proceeds of assets held abroad by NRIs who have returned to India permanently, RBI said an investor can retain and reinvest the income earned on investments made under the Liberalised Remittance Scheme.The bank said that clarifications are as per relevant sections of the Foreign Exchange Management Act of 1999.

Source: The Hindu

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