Bank KYC forms to start asking your religion: Here's why
Banks may soon start asking depositors to disclose their religion. What's the need for this? Amendments made to Foreign Exchange Management Act (FEMA) regulations allow for immigrants of select religions to open Non-Resident Ordinary Rupee (NRO) accounts and purchase property here. If all this sounds eerily similar to the contentious Citizenship Amendment Act (CAA), read on, because things only get more curious.
FEMA amendment benefits non-Muslims from Pakistan, Bangladesh, Afghanistan
According to The Times of India, as per these FEMA amendments immigrants of select religions from select countries, who hold long-term visas (LTVs) in India, will be allowed to open NRO accounts and buy residential property. These LTV-holders may be beneficiaries of the amendment if they are Hindus, Sikhs, Buddhists, Jains, Parsis or Christians from Pakistan, Bangladesh, or Afghanistan.
What are NRO accounts?
A Non-Resident Ordinary Rupee (NRO) account could previously only be opened by a Person of Indian Origin (PIO) and an Overseas Citizen of India (OCI). These accounts allow an NRI (Non-Resident Indian)/PIO/OCI to deposit their income originating in India.
New norms exclude Muslims, atheists, etc.
These regulations exclude immigrants of other religions (such as Muslims) or those who are atheists from availing its benefits. It also excludes immigrants from countries, including Myanmar, Sri Lanka, and Tibet. Since the benefits are limited to those of certain faiths, banks are likely to introduce a column on 'Know-Your-Customer' (KYC) forms, asking for its depositors' religion. According to TOI, RBI refused to comment.
Amendment introduced last year, but no one noticed
A Finance Ministry source told TOI that these FEMA amendments were issued by the Reserve Bank of India last year, however, everyone was too focused on the financial crisis. The source said, "No one would've expected a religious discriminatory clause in rules relating to banking."
After getting citizenship, depositors' NROs will be made resident accounts
Reportedly, those LTV-holders who are eligible to benefit from this amendment will have their NRO accounts converted to resident accounts once they attain Indian citizenship under the Citizenship Act, 1955. The amended Citizenship Act accords Indian citizenship to Hindus, Sikhs, Buddhists, Jains, Parsis or Christians from Pakistan, Bangladesh, or Afghanistan, provided they came to India on or before December 31, 2014.
What else does the amendment say?
Further, the FEMA (Acquisition and Transfer of Immovable Property in India) Regulations, says, "A person being a citizen of Bangladesh, Pakistan or Afghanistan belonging to minority communities in those countries—Hindus, Sikhs, Buddhists, Jains, Parsis and Christians—and granted an LTV, may purchase only one residential immovable property in India as dwelling unit for self-occupation and only one immovable property for carrying out self-employment."
What were the regulations before the amendment?
Earlier, foreign nationals could open NRO accounts for no longer than six months, provided it isn't credited by local funds, except for the interest accrued. Further, foreign citizens residing in India— who are not citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, and Bhutan—could purchase residential property here after a residential period of over six months.
Such norms 'unheard-of' and 'unconstitutional'
The CEO of a public sector bank told TOI, "It's news to me that the FEMA—primarily a financial regulation—has a religious cause." Banking analysts on Dalal street said such a norm was "unheard-of." Activists and lawyers claimed the move violates Article 14 of Indian Constitution. Former IAS Kannan Gopinathan said the amendment has "no practical applicability" as religion can be changed.
