Amid Citizenship Chaos, RBI Tweaks FEMA Rules, Banks To Seek Customer's Religion?

Amid intense chaos over the Citizenship Law, a report on Saturday said that the Reserve Bank of India has tweaked a key section of the FEMA rule that may change banking sector in coming days. According to the Times of India report, the RBI reportedly tweaked FEMA regulations that will limit the banking benefits to the migrants excluding Muslims. It also means that in coming days the banks would also add section of religion in the ‘know your customer’ forms. The TOI report said that the rule was changed in 2018. According to the changes in the Foreign Exchange Management Regulations, the amendments will be specifically applicable to migrants from minority communities – Hindu, Sikhs, Parsis, Jains, Christians and Buddhists. The report says that just like the Citizenship Act, the new RBI rules clearly exclude Muslim migrants from Pakistan, Bangladesh and Myanmar. However, the RBI has neither confirmed or denied the report.

The text of the particular section that concerns the changes in the banking for migrants is available on the RBI website. Amendment to the Schedule 3 says, “A person being a citizen of, Bangladesh or Pakistan belonging to minority communities in those countries, namely, Hindus, Sikhs, Buddhists, Jains, Parsis and Christians who is residing in India and has been granted a Long Term Visa (LTV) by the Central Government is permitted to open with an authorized dealer only one NRO Account. The said NRO account shall be converted to a resident account once the person becomes a citizen of India within the meaning of the Citizenship Act, 1955. Such accounts can be opened by Authorised Dealers only.”

The RBI changes are similar to the Citizenship Amendment Act that was passed by Parlaiment on December 11.   The nation is witnessing agitations that erupted after the Narendra Modi government passed the contentious legislation in Parliament on December 11. Two days later, President Ram Nath Kovind gave assent and making it a law on December 13. The Citizenship Act grants Indian nationality to Buddhists, Christians, Hindus, Jains, Parsis and Sikhs who fled Afghanistan, Bangladesh and Pakistan in half the time of other groups if they can argue they suffered religious discrimination in their country of origin.