Mumbai: Foreign banks operating in India have now been permitted to remit net profits / surplus (net of tax) earned on a quarterly basis to their head offices. The remittance can be made following quarterly audit, without prior the Reserve Bank of India (RBI) approval.

This move comes as a relaxation since earlier remittances to the head offices could be sent only on an annual basis at the close of each financial year following an audit.

According to a notification from the RBI, the profits from the course of business out of Indian operations may be remitted on a quarterly basis, to head offices without prior approval of the RBI provided the accounts of the bank are audited on a quarterly basis and appropriate transfer to statutory reserves are made as per the provisions of the Banking Regulation Act, 1949, and directions issued by the RBI in this regard are complied with.

In the event of excess remittance, the foreign banks' head office should immediately make good the shortfall. However, most foreign banks in India only have an annual audit and in order to use this provision, a quarterly audit will have to be worked out.