New Delhi: The Reserve Bank of India and the Narendra Modi government have tweaked multiple rules over the last 20 months to make life easier for “minority community” citizens of Pakistan, Bangladesh and Afghanistan who reside in India.

These new regulations – which govern everything from overstaying on a visa to opening bank accounts and buying residential property – appear to go out of their way to exclude Muslims who are citizens of the three countries and are legal residents of India.

Indeed, the modified rules explicitly state that they only apply to people from the Hindu, Sikh, Buddhists, Jain, Parsi and Christian communities.

Senior bankers and corporate lawyers who The Wire spoke to described them as puzzling and certainly open to judicial challenge for violating Article 14 of the Indian constitution which says that “the State shall not deny to any person equality before the law.”

The Hindu, which first reported about one instance of a change in rules, quoted a RBI source as saying they had carried out the changes on the instructions of the Centre, which had asked if there was anything that can be done to help people who had been “residing in the country for a long time”.

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The changes also assume new significance in light of the Citizenship (Amendment) Act which grants Indian citizenship to all non-Muslims from Afghanistan, Pakistan and Bangladesh who entered India before 2015.

Over the last week, protests have broken out across the country against the Act, with the opposition calling the new law unconstitutional and discriminatory.

Until now, it had been assumed that this religious profiling was confined to the grant of citizenship to “illegal immigrants” belonging to six specified religions from these three countries. But it now emerges that the same discriminatory principle has been extended to the banking system as well.

Property buying

In March 2018, 20 months before the CAA was passed, the Reserve Bank of India came out with changes to the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations.

Section 7 of the new rules introduced a fresh clause that allowed holders of ‘long-term visas’ (LTVs) to buy residential property within India. Though Indian has many long term visa holders from other countries, and many Muslim LTVs from Pakistan (eg. Pakistani spouses of Indian citizens who are resident in India), the new clause only applies to LTV holders who are citizens of three countries – Afghanistan, Bangladesh and Pakistan and belong to a “minority community in those countries” – i.e. Hindus, Sikhs, Buddhists, Jains, Parsis and Christians.

Why did this rule need to come into existence though?

A senior banker with a state-run lender told The Wire that it was because until then, existing rules banned all Pakistani, Afghani and Bangladeshi citizens from owning residential and immovable property in India without prior permission from the RBI.

“Existing rules always allowed foreigners to buy property in India after satisfying certain residency requirements like staying in the country for more than 180 days. But foreign citizens from a number of countries had restrictions placed on them for national security reasons. Even Chinese and Iranian citizens can’t buy property in India without specific permission,” the senior banker said.

“To help non-Muslim citizens from those three countries, these changes appear to have come about in a sort of backdoor mechanism. Whether it is right or wrong it’s hard to say, but it’s difficult to think of an economic rationale for denying people of certain faiths this right,” he added.

Opening an NRO account

Eight months after that, in November 2018, the RBI also allowed citizens of Pakistan and Bangladesh who were residing in India and belonging to the same set of minority communities to open an NRO (non-resident ordinary) account.

The new rules, called the ‘Foreign Exchange Management (Deposit) (Amendment) Regulations, 2018, noted:

“E. A person being a citizen of, Bangladesh or Pakistan belonging to minority communities in those countries, namely, Hindus, Sikhs, Buddhists, Jains, Parsis and Christians who is residing in India and has been granted a Long Term Visa (LTV) by the Central Government is permitted to open with an authorised dealer only one NRO Account. The said NRO account shall be converted to a resident account once the person becomes a citizen of India within the meaning of the Citizenship Act, 1955. Such accounts can be opened by Authorised Dealers only, A person being a citizen of Bangladesh or Pakistan belonging to minority communities in those countries, namely, Hindus, Sikhs, Buddhists, Jains, Parsis and Christians who is residing in India and has applied for a Long Term Visa (LTV) which is under consideration of the Central Government is permitted to open with an authorised dealer only one NRO Account which will be opened for a period of six months and may be renewed at six monthly intervals subject to the condition that the individual holds a valid visa and valid residential permit issued by Foreigner Registration Office (FRO)/ Foreigner Regional Registration Office (FRRO) concerned. Such accounts can be opened by Authorised Dealers only,”

While the Times of India reported on Saturday morning that this change would imply that all Indian banks will now introduce a new column in their KYC (know your customer) forms that would ask for a customer’s religion, RBI sources told The Wire that this was unlikely.

Indeed, CNBC also reported on Saturday afternoon that only NRO account forms would have a column asking for religious identity and this would not apply to new accounts that are opened by Indian citizens.

“It is silly either way to expect a bank to be able to verify a person’s religion. How would this be done in a manner that can catch all potential misuse and fraud,” a senior corporate lawyer, who declined to be identified, told The Wire.

On Saturday evening, the finance ministry confirmed that the changes would not require Indian citizens to furnish details of religion while opening a bank account, but continued to remain silent on the other discriminatory against Muslims who are here on long-term visas from those three countries.

Visa overstay penalties

To top this off, in early 2019, India’s external affairs ministry introduced new regulations on the penalty for visitors from Bangladesh, Pakistan and Afghanistan who overstay their visa that also discriminate against Muslims. Bangladeshi officials have criticised the move.

According to the changed rules, members of the ‘majority’ community from these countries now have to pay a penalty that is at least 200 times higher than compared to the ones that would have to be paid by minorities (non-Muslims, mainly Hindus) if they overstay their visa.

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The FRRO (Foreigner Regional Registration Office) rules say that the “penalty of overstay” for “minority communities from Pakistan, Bangladesh and Afghanistan” is Rs 500 for more than two years, Rs 200 for 91 days to two years and Rs 100 for up to 90 days.

On the other hand, if the person who overstayed does not belong to minority community, then the charges are in dollars — $500 (Rs 35,000), $400 (Rs 28,000) and $300 (Rs 21,000) — all for the same duration of overstay.

“This means if Liton Das (a Bangladeshi cricketer, a Hindu) overstays for a day, then he will have to pay Rs 100, whereas if the person’s name is Saif Hasan, he will have to pay over Rs 21,000, which is what Mr. Hasan paid,” a senior Bangladeshi official told the Hindu.