RRBs with assets less than $175 million not to register with FATCA
MUMBAI: The Reserve Bank has exempted Regional Rural Banks with assets less than USD 175 million to register with the US Internal Revenue System under FATCA.
It also said that if RRBs, taken together with related entities, do not have assets over USD 500 million, they need not register with US IRS under the Foreign Account Tax Compliance Act.
“It is clarified that those RRBs which do not have more than USD 175 million in assets on balance sheet, and the RRB and any related entities, taken together, do not have more than USD 500 million in total assets on their consolidated or combined balance sheet are treated as Local Banks.
“Such RRBs, therefore, need not register with United States – Internal Revenue Service (US IRS),” RBI said in a notification.
It said RRBs with more than USD 175 million in assets on their balance sheet, and the RRB with related entities, taken together having more than USD 500 million in total assets are required to register with FATCA.
These banks are allowed to accept deposits from NRIs and are required to obtain Global Intermediary Identification Number (GIIN) and comply with FATCA requirements.
RBI asked the RRBs to may take action appropriately and forward the GIIN number to it.
FATCA is a US law whereby foreign financial institutions across the world have to report to the US IRS on any transaction of clients who could be subjected to American tax laws.
Non-compliance with FATCA entails 30 per cent withholding tax on the US source payments. Also, wrong or incorrect reporting may also have similar consequences.
