The RBI has, by way of Notification no. FEMA 5(R)(6)/2026-RB dated June 18, 2026, amended the Foreign Exchange Management (Deposit) Regulations, 2016 (‘Deposit Regulations’). The amendment primarily liberalises the framework for opening and operating Special Non-Resident Rupee Accounts (‘SNRR Accounts’) by persons resident outside India.

Prior to the amendment, a person resident outside India having a business interest in India was permitted to open, hold and maintain, with an AD Bank in India, or its branch outside India, an SNRR Account. Pursuant to the amendment, the requirement to have a business interest in India has been done away with. Further, an SNRR Account can now be opened, held and maintained with an AD Bank in International Financial Services Centre (‘IFSC’) in India. The SNRR Account may be used for permissible current and capital account transactions with persons resident in India, in accordance with the rules and regulations framed under the Foreign Exchange Management Act, 1999 (‘FEMA’), and for bona fide transactions with persons resident outside India.

The amendment also permits: (i) transfers from Non-Resident Ordinary (‘NRO’) account as a permissible credit to the Non-Resident External (‘NRE’) account; and (ii) transfers to NRE or SNRR accounts, as a permissible debit to the NRO account, both within the limit specified under Regulation 4 of the Foreign Exchange Management (Remittance of Assets) Regulations, 2016 (which is USD 1 million). Further, certain earlier operational conditions for SNRR Accounts, including requirements relating to transaction-specific nomenclature, business-specific debits and credits, commensurate balances, and account tenure, have been deleted.

The RBI has also clarified that transactions between persons resident outside India involving SNRR Accounts, which may not be subject to compliance under FEMA or the rules and regulations framed thereunder, may be effected by AD Banks based on instructions or mandates from the account holder indicating the underlying purpose of the transfer.