In further updates to the FATCA implementation , RBI has exempted following categories of Regional Rural banks from registration with IRS
RRBs having assets of less than 175 Mn
RRBs along with related entities , taken together do not have more than USD 500 Mn in total assets on their consolidated or combined balance sheet.
Such RRBs will be treated as local banks and need not register with IRS .
However this raises questions , RBI has laid down certain criteria to be fulfilled by RRBs before they are allowed to accept FCNR, NRo, NRE deposits . however none of the criterion specified includes a monetary cut off as above so effectively banks will continue to accept such deposits and still will be considered as local banks. This appears to be contradictory to the FATCA definition of a local FFI
More clarity required from RBI in this regard
