created by Rajesh Dhruva

Representation to Finance Ministry & Financial Institutions  » Indian Banks requested to inform USA NRIs regarding reporting under FATCA

Specimen emails sent to all Banks and Mutual Fund Houses in India.
To, 
Smt. Arundhatti Bhattacharya,
Managing Director,
SBI Bank.

Dear Smt. Arundhatti Bhattacharya,
 
Good wishes.

We are a group of Chartered Accountants providing advisory services to Non-Resident Indians (NRIs) and returning NRIs in the matters pertaining to Foreign Exchange Laws, Tax Laws, Double Taxation Avoidance Agreement (DTAA); inbound bank deposits and investment  in Indian Mutual Funds and Indian US$ Bonds  and creators of  NRI related popular  websites :www.nribanks.com  the only website displaying monthly  updated interest rates of almost all banks in India offered to NRIs ; www.femaonline.com    an edited and updated version of  Foreign Exchange Management Act 1999 and Regulations thereunder as also Tax Laws pertaining to NRIs and www.nrimutualfunds.com  presenting the very best of equity and income schemes of Indian Mutual Funds. 
 
It is understood that SBI Bank and all the Banks have applied for Global Intermediary Identification Number(GIIN) under Foreign Account Tax Compliance Act (FATCA) of the USA. As such upon the Inter Governmental Agreement(IGA) being finally signed by Indian Government, SBI Bank will report accounts showing the account holder as US citizen or USA address or USA phone number or USA Person as Power of Attorney holder if the balance in such account exceeds US$ 50,000 as on 30th June 2014.

Being invited by NRI Associations of Physicians , Dental Surgeons, Diamond Merchants and various Communities I had opportunity to interact with NRIs across USA last year whereby I have noticed serious concerns amongst NRIs about this eventual reporting by Indian Banks.
Now as and when SBI Bank provides such information to the IRS through Central Board of Direct Taxes (CBDT) in time to come IRS will  issue notices to NRI account holders holding NRO, NRE or FCNR account whose information is provided to the IRS by Indian Banks and also initiate penal action.
 
I therefore suggest that a specific intimation to USA NRIs holding NRE , NRO or FCNR  accounts  may be sent about their account being reported to US Authorities under the IGA and if the Bank does not have resources to notify specific details a general intimation to all these US NRI account holders may be sent informing them about SBI Bank providing information of all US account holders to the IRS under the IGA whereby NRI account holder will have an opportunity to file declarations under Streamlined Domestic Offshore Procedures (SDOP) well before notice for penal action is issued by the IRS.

Streamlined Domestic Offshore Procedures (SDOP) is an initiative of the US Authorities whereby appreciating possible ignorance or negligence tax payers have been offered declaration scheme requiring payment of penalty of only 5% on the highest value of overseas financial assets over previous six year ends together with revision of Tax Returns for previous three years and filing of Foreign Bank Account Reporting (FBAR) for previous six years . The benefits of this schemes  are available only if the Tax Payer voluntarily files declaration under SDOP and not if a notice is issued by IRS.

I am sure that the Bank will address this issue appropriately as such action of intimation is morally , ethically and professionally a must.
 
In case any clarifications are required my Office will be happy to provide the same and I thank you in anticipation.
 
Sincerely ,
 
RAJESH H DHRUVA
Chief Executive 
femaonline.com
Tel. No. : 0091 281 245 3367 (four lines) / 245 9613
Cell : 0091 98240 49944
email  rajesh@femaonline.com ; keynote@nribanks.com 

Dear Mr Dhruva,  

We are in receipt of your mail bringing forth some suggestions to ensure smooth transition to FATCA stipulations. We are working on these issues and do feel that it will  be in the interest of all concerned if the transition is hassle free.  

Once again, conveying our thanks for your inputs in the matter. 

With regards
"........................"
State Bank of India
Corporate Centre Mumbai

To,
Smt. Chanda Kochar,
Managing Director,
ICICI Bank,
Mumbai

Dear Smt. Kochar,

Good wishes.

We are a group of Chartered Accountants providing advisory services to Non-Resident Indians (NRIs) and returning NRIs in the matters pertaining to Foreign Exchange Laws, Tax Laws, Double Taxation Avoidance Agreement (DTAA); inbound bank deposits and investment  in Indian Mutual Funds and Indian US$ Bonds  and creators of  NRI related popular  websites :www.nribanks.com  the only website displaying monthly  updated interest rates of almost all banks in India offered to NRIs ; www.femaonline.com    an edited and updated version of  Foreign Exchange Management Act 1999 and Regulations thereunder as also Tax Laws pertaining to NRIs and www.nrimutualfunds.com  presenting the very best of equity and income schemes of Indian Mutual Funds.

It is understood that ICICI Bank and all the Banks have applied for Global Intermediary Identification Number(GIIN) under Foreign Account Tax Compliance Act (FATCA) of the USA. As such upon the Inter Governmental Agreement(IGA) being finally signed by Indian Government,  ICICI Bank will report accounts showing the account holder as US citizen or USA address or USA phone number or USA Person as Power of Attorney holder if the balance in such account exceeds US$ 50,000 as on 30th June 2014.

Being invited by NRI Associations of Physicians , Dental Surgeons, Diamond Merchants and various Communities I had opportunity to interact with NRIs across USA last year whereby I have noticed serious concerns amongst NRIs about this eventual reporting by Indian Banks.
 

 Now as and when ICICI Bank provides such information to the IRS through Central Board of Direct Taxes (CBDT) in time to come IRS will  issue notices to NRI account holders holding NRO, NRE or FCNR account whose information is provided to the IRS by Indian Banks and also initiate penal action.

I therefore suggest that a specific intimation to USA NRIs holding NRE , NRO or FCNR  accounts  may be sent about their account being reported to US Authorities under the IGA and if the Bank does not have resources to notify specific details a general intimation to all these US NRI account holders may be sent informing them about ICICI Bank providing information of all US account holders to the IRS under the IGA whereby NRI account holder will have an opportunity to file declarations under Streamlined Domestic Offshore Procedures (SDOP) well before notice for penal action is issued by the IRS.

Streamlined Domestic Offshore Procedures (SDOP) is an initiative of the US Authorities whereby appreciating possible ignorance or negligence tax payers have been offered declaration scheme requiring payment of penalty of only 5% on the highest value of overseas financial assets over previous six year ends together with revision of Tax Returns for previous three years and filing of Foreign Bank Account Reporting (FBAR) for previous six years . The benefits of this schemes  are available only if the Tax Payer voluntarily files declaration under SDOP and not if a notice is issued by IRS.

I am sure that the Bank will address this issue appropriately as such action of intimation is morally , ethically and professionally a must.

In case any clarifications are required my Office will be happy to provide the same and I thank you in anticipation.

Sincerely ,
RAJESH H DHRUVA
Chief Executive 
femaonline.com
Tel. No. : 0091 281 245 3367 (four lines) / 245 9613
Cell : 0091 98240 49944
email  rajesh@femaonline.com ; keynote@nribanks.com

 

Dear Sir,

We refer to our e-mail dated May 19, 2015. 

At the outset, we apologise for the inconvenience caused to you.
 

We thank you for your mail and would like to mention that in absence of an Intergovernmental Agreement (IGA) being signed between Government of India and US Government, at present FIs have not received operational guidance to be followed in India.  ICICI Bank would approach its customers as part of the Foreign Account Tax Compliance Act (FATCA) due-diligence process and shall take necessary steps required, on receiving operational guidance for implementation of FATCA.

We thank you for writing to us.
Sincerely,
"........................."
Senior Management Desk
ICICI Bank