🟢 Final Amendment Regulations — Already in Force
Issuing Authority: Reserve Bank of India (Foreign Exchange Department, Central Office), Mumbai | Notified: June 18, 2026 | Effective Date: June 18, 2026 (date of publication in the Official Gazette) — no transition period, the amendment applies from day one.
Background: Why the SNRR Framework Keeps Changing
The Special Non-Resident Rupee (SNRR) account has, since its introduction, served as the principal rupee-denominated vehicle for persons resident outside India to route permissible transactions with Indian residents without needing a foreign currency account. Governed by Schedule 4 read with Regulation 5(4) of the Foreign Exchange Management (Deposit) Regulations, 2016, the account was historically built around a narrow gatekeeping condition: the account holder had to demonstrate a "business interest in India," and the account itself had to carry the nomenclature of, and confine its debits and credits to, that specific business.
That gatekeeping model has been under sustained pressure for several years as RBI has pushed to deepen rupee usage in cross-border trade and investment, particularly through the GIFT City International Financial Services Centre (IFSC). RBI has issued a series of amendments to the SNRR framework since 2016, with the most recent prior to this one dated January 2025 — all of them building toward easier non-resident access while the business-interest test remained in place.
The Sixth Amendment Regulations, 2026 take that liberalisation a step further. They detach the SNRR account almost entirely from the business-interest condition, open up a previously prohibited transfer route from NRO accounts, and strip out several of the operational conditions that had made SNRR accounts administratively heavier to maintain than NRE or NRO accounts. The amendment also formally defines "IFSC" within the Deposit Regulations for the first time.
Section 2 — New Definition of "IFSC"
📝 New Definition Inserted — Regulation 2, clause (v-a)
"International Financial Services Centre" or "IFSC" now carries the same meaning assigned to it in Section 3(g) of the International Financial Services Centres Authority Act, 2019. This cross-reference anchors every subsequent mention of "IFSC" across the amended Schedules to a single statutory source, rather than leaving it undefined or context-dependent.
Regulation 5(4) — Who Can Open an SNRR Account
Sub-regulation (4) of Regulation 5 has been substituted in full. The earlier text — even after the January 2025 amendment — conditioned eligibility on the account holder having "a business interest in India." That qualifier has now been deleted entirely.
✅ What Is Now Permitted
Any person resident outside India — without having to establish a business interest in India — may open, hold and maintain an SNRR account with an authorised dealer in India or its branch outside India, including a branch located in an IFSC in India, subject to the conditions specified in Schedule 4.
The explicit insertion of "(including in an IFSC in India)" puts beyond doubt that AD bank branches operating within GIFT City and similar IFSCs are covered, aligning the regulation text with the practical expansion of IFSC banking units that has occurred since 2025.
Schedule 4, Paragraph 1 — Purpose of the SNRR Account
Paragraph 1 of Schedule 4 is substituted to mirror the new Regulation 5(4). A person resident outside India may now open an SNRR account with an AD in India or its branch outside India (including in an IFSC in India) for two distinct purposes: putting through permissible current and capital account transactions with a person resident in India, in accordance with the rules and regulations framed under the Act; and putting through any bona fide transaction with another person resident outside India.
💡 Practical Reading
By dropping the business-interest gatekeeping condition, the regulation converts the SNRR account from a purpose-tied facility into a far more general-purpose rupee account available to any non-resident, while still requiring transactions with residents to stay within permissible current and capital account categories under FEMA.
Schedule 4 — Five Operational Conditions Deleted
The existing paragraphs 2, 5, 6, 7 and 8 of Schedule 4 are deleted outright with this amendment. The notification does not specify the content being removed — only that these five paragraphs no longer form part of the regulations. Read together with the deletion of the business-interest test from Regulation 5(4) and the new general-purpose wording of Schedule 4, paragraph 1, the removal of five consecutive paragraphs signals a substantial paring-back of the conditions that previously sat around the SNRR account.
❌ What This Means for AD Banks
AD banks and compliance teams should pull the pre-amendment text of Schedule 4, paragraphs 2, 5, 6, 7 and 8 from their own copy of the Deposit Regulations, 2016 (as amended) to confirm exactly which internal conditions, SOPs, or forms reference these now-deleted provisions, since the notification itself does not restate their content.
Schedule 4, Paragraph 10 — NRO-to-SNRR Transfers
This is one of the more consequential changes in the amendment. The existing paragraph 10 — under which an NRO-to-SNRR transfer route was not available in this form — is substituted entirely with new wording that ties the transfer to Schedule 3.
✅ New Position
Transfer from an NRO account to an SNRR account shall now be in accordance with Schedule 3 of the Regulations — i.e., it is permitted, subject to the conditions governing NRO account debits.
This change does not stand alone. It is wired into two further amendments in Schedule 1 and Schedule 3, discussed below, which create a coordinated transfer pathway between NRO, NRE and SNRR accounts.
Schedule 1 and Schedule 3 — New NRO Transfer Routes
In Schedule 1 (the NRE account scheme), paragraph 3 — the list of permitted credits to an NRE account — gains a new item (k): a transfer from an NRO account is now an expressly permitted credit, within the limit specified in Regulation 4 of the Foreign Exchange Management (Remittance of Assets) Regulations, 2016.
Mirroring this, Schedule 3 (the NRO account scheme), sub-paragraph (B) of paragraph 3 — the list of permitted debits from an NRO account — gains a new item (v): a transfer to an NRE account or to an SNRR account, again within the same Regulation 4 limit under the Remittance of Assets Regulations.
💡 Why This Matters
NRO-to-NRE transfers within the prescribed remittance-of-assets ceiling were already a familiar route for NRIs and PIOs. By extending the same ceiling-bound route to NRO-to-SNRR transfers and codifying both as express Schedule entries, RBI brings the SNRR account onto a comparable transfer footing with the NRE account — a marked departure from the earlier blanket prohibition.
Schedule 4, Paragraph 16 — New: PROI-to-PROI SNRR Transactions
A new paragraph 16 is inserted after the existing paragraph 15 of Schedule 4.
⚠️ New Operational Mechanism
Transactions between two persons resident outside India that involve SNRR accounts, and which may not themselves be subject to compliance requirements under the Act or the rules and regulations made thereunder, are to be effected by the AD bank on the basis of instructions or a mandate from the account holder — and that mandate must indicate the underlying purpose of the transfer.
This gives AD banks an explicit, document-based basis for processing SNRR-to-SNRR or related transfers purely between non-residents, where the transaction otherwise falls outside the compliance perimeter of FEMA itself, rather than leaving such transfers in a grey area.
Earlier Framework vs. New Requirement
Compliance Checklist for AD Banks and CS/Compliance Teams
☑ Remove the "proof of business interest in India" requirement from SNRR account-opening forms, KYC checklists and internal SOPs.
☑ Enable processing of NRO-to-SNRR transfers in core banking and reporting systems, gated by the Regulation 4 Remittance of Assets ceiling.
☑ Withdraw internal tenure-tracking flags and renewal-approval workflows that were built around the now-deleted paragraph 8 tenure cap.
☑ Update GIFT City / IFSC branch account-opening protocols to reflect the explicit statutory coverage of SNRR accounts at IFSC branches.
☑ Brief relationship managers and back-office teams on the new mandate-based process under paragraph 16 for SNRR transactions between two non-residents.
☑ Reissue customer-facing SNRR account terms and conditions documents to drop the nomenclature-by-business and tenure clauses.
☑ Confirm R-Return and other RBI reporting templates still capture transaction-purpose data even though the express nomenclature requirement is gone.
CorpLawUpdates Analysis
The single most significant change in this amendment is the removal of the business-interest test from Regulation 5(4) and Schedule 4, paragraph 1. For close to a decade, that test was the primary screen AD banks used to decide whether a non-resident could open an SNRR account at all, and it shaped the nomenclature, balance-monitoring and tenure conditions that followed from it. Deleting the test, and then deleting paragraphs 2, 5, 6 and 8 along with it, effectively converts the SNRR account into a general-purpose, current-and-capital-account-transaction-ready rupee account for any non-resident — closer in spirit to an NRE account than to the narrowly purpose-bound facility it used to be.
The reversal on NRO-to-SNRR transfers deserves equal attention. Paragraph 10's blanket prohibition was a long-standing feature of the SNRR framework, and its replacement — explicitly tying the new transfer route to the same Regulation 4 Remittance of Assets ceiling that already governs NRO-to-NRE transfers — signals that RBI wants SNRR, NRE and NRO accounts to function as a more fungible set of rupee accounts for non-residents, rather than as siloed schemes with incompatible transfer rules.
The likely compliance challenge for AD banks lies less in the legal drafting and more in operational retrofitting: core banking parameters, account-opening checklists, periodic review triggers and staff training material built around the old business-interest and tenure conditions will all need to be revisited in parallel, and reasonably quickly, since the amendment took effect on the date of Gazette publication with no transition window. Banks that continue applying the deleted conditions risk turning away eligible non-resident customers or unnecessarily restricting permitted NRO-to-SNRR transfers.
Looking ahead, this amendment fits a clear pattern visible since the Fifth Amendment of January 2025: RBI is steadily dismantling the procedural friction around SNRR accounts as part of its broader rupee-internationalisation agenda and its push to make GIFT IFSC banking units commercially attractive. Practitioners should watch for a corresponding update to the FED Master Direction on deposits, which will need to be revised to reflect the deleted Schedule 4 paragraphs, and should not be surprised if RBI follows up with further easing of SNRR-linked reporting requirements in the coming notifications.
Source: Foreign Exchange Management (Deposit) (Sixth Amendment) Regulations, 2026, Notification No. FEMA 5(R)(6)/2026-RB dated June 18, 2026, issued by the Reserve Bank of India, Foreign Exchange Department, Central Office, Mumbai. Published in the Gazette of India, Extraordinary, Part III, Section 4, No. 408, dated June 18, 2026. Signed by N Senthil Kumar, Chief General Manager. [ADVT.-III/4/Exty./177/2026-27]
This article is for informational and educational purposes only and does not constitute legal or regulatory advice. Verify with primary regulatory sources before acting.
