How can a Non Resident Indian Account be opened by an NRI?
N.R. Accounts can be opened by an NRI after completing the prescribed account opening form. The form could be countersigned / introduced by a person known to the bank/ Indian Embassy/ Indian High Commission/ Notary Public in the country of residence of the account holder.
Are NRIs permitted to maintain accounts in rupees or in foreign currency?
Accounts can be maintained by NRIs either in rupees or in foreign currency.
What are the types of rupee accounts permitted to be maintained?
Two types of rupee accounts. viz. Non Resident (External) Rupee Accounts (NRE accounts), Ordinary Non Resident Rupee Accounts (NRO accounts) permitted to be maintained.
Can these accounts be opened by an authorised dealer/ authorised bank without the prior permission of Reserve Bank?
Yes. Funds for opening of or credit to NRE accounts have, however, to be remitted from abroad or tendered in the form of foreign currency notes, travellers cheques etc. while on a visit to India.
Can proceeds of foreign currency notes/ travellers cheques brought by NRIs during their visit to India be credited to their NRE accounts without any restriction?
Yes. However credits exceeding US$ 10,000 or its equivalent representing proceeds of foreign currency notes/ travellers cheques will be allowed provided they were declared to the Customs in the Currency Declaration form at the time of entry into India (Out of this amount, maximum limit for currency notes is US$ 5000 or its equivalent).
What is the distinction between NRE accounts and NRO accounts?
Funds remitted from abroad and which are of repatriable nature can be credited to NRE accounts. Local funds which do not qualify, under the exchange control regulations, for remittance outside India can be credited to NRO accounts.
Can NRO and NRE accounts be maintained in the form of Current, Saving or Fixed Deposit Accounts?
What is the rate of interest payable on such accounts? The accounts can be maintained in any form, i.e Current, Saving or Fixed Deposit Accounts. The rates of interest are fixed by the Bank / Reserve Bank of India which are subject to change from time to time.
Are debits and credits to NRO accounts allowed freely by banks maintaining the accounts?
Yes. Individual credits beyond Rs.10,000 have,. however to be supported by documentary evidence to indicate that the funds represent legitimate dues of the account holder.
What about operations on NRE accounts?
Debits for local disbursements are allowed freely. Credits to the accounts of funds emenating from a local source would be permissible only if the funds are of a repatriable nature and can be remitted by the account holder abroad.
Can funds in NRE/ NRO accounts be repatriated outside India?
Banks in India have been authorised to allow repatriation of funds held in NRE accounts freely. Funds held in NRO accounts which would generally be from a local source cannot ordinarily be repatriated outside India. Reserve Bank would consider repatriation of such funds on the merits of each case provided it is satisfied that the funds are of a repatriable nature and have not also lost their identity.
Can funds in NRE/NRO accounts be utilised for payment of air fare to/ from/ in India of the account holder or his dependents?
Yes. Bank maintaining the accounts have been authorised to permit such utilisation.
What should Non-Resident account holder(s) do with the proceeds / balance in their NRNR Account?
The NRNR a/c holder has the option to directly credit the maturity proceeds to the NRE account but NOT to FCNR(B) A/C.
Can a Non-Resident (NRIs) prematurely withdraw the proceeds of NRNR deposite & credit his NRE A/C?
No. The proceeds of NRNR deposits can be credited to NRE A/C only on maturity and in case of premature withdrawal the proceeds shall be credited only to NRO A/C.
Are the balance held by the Non-Resident in their NRO A/C repatriable?
The NRO scheme remains unchanged . Therefore the balance held in such accounts continue to remain no-repatriable. The quantum of deposites representing only current income (like pension, dividend, rent, interest etc.)will be permitted to be repatriated outside India.
What are the foreign currencies in which accounts can be maintained?
FCNR accounts can be maintained in Pound Sterling, US dollar, Japanese Yen and Euro. Presently the bank is not quoting interest rates for Japanese Yen deposits.
Are FCNR Accounts permitted to be maintained in the form of Current / Saving Accounts?
No. FCNR Accounts can be maintained only in the form of "term deposit" i.e. a deposit kept for a fixed period or which is subject to withdrawal or repayment after notice.
What is the maximum period of maturity for an FCNR(B) term deposite account?
FCNR account can be opened for a maximum of 5 years.
Is premature withdrawal of the FCNR term deposit allowed?
Yes, however this is subject to the levy of a penalty.
What is the penalty for premature withdrawal of a FCNR deposit?
Interest in such cases is paid at one per cent below the interest rate payable for the period for which the deposit has actually remained with the bank.
If an FCNR deposit of 12 months maturity is withdrawn prematurely, would any interest be payable.
While the premature withdrawal would be allowed, no interest would be payable.
Are the interest rates on FCNR deposits liable for periodic revision?
The rates are based on the rates prevailing in international markets for the currencies concerned for deposits of comparable maturities and are, therefore, liable for change. But deposits will continue to earn the contracted rates till maturity. Interest rate on FCNR deposits are fixed by the bank from time to time which are very competitive.
What about debits to FCNR accounts for local payments?
Debits for local payments are allowed freely.
Are funds in FCNR accounts freely repatriable abroad.
Yes.
Are any tax concessions available to NRIs?
Income from interest on monies standing to the credit of accounts other than NRO accounts is exempt from income tax. Gifts from such accounts are also free of Gift tax.
At one time, can NRIs maintain all types of N.R. Accounts or just one type of account?
NRIs can maintain any one or all types of NRI accounts with our branches in India.
Can loans/ overdrafts be given to the deposit holders themselves against the collateral/ security of NRI deposits in India?
Yes. Loans/ overdrafts can be given to the account holders against the collateral/ security of all types of Non Resident deposits. The regulations relating to loans/ overdrafts are different for different NRI accounts. Loans/ overdrafts cannot be given for carrying on agricultural / plantation activities or for investment in the real estate business.
Can loans/ overdrafts be given to third parties against the collateral/ security of NRI deposits in India?
Loans to third parties are allowed against the collateral/ security of NRI deposits subject to fulfilment of certain formalities. Loans/ overdrafts cannot be given for carrying on agricultural/ plantation activitiess or for investment in real estate business.
Can loans/ overdrafts be adjusted/ repaid in Indian Rupees?
Yes. Commercial rate of interest as applicable is charged if the adjustment is done in Indian Rupees.
