NRI FAQs

Who is an NRI?

As per Section 2(w) of FEMA, 1999, an NRI is defined as a person resident outside India - means a person who is not resident in India;

The definition under FEMA is explained in simple terms for individuals hereunder.

• a. “Person resident outside India” is defined indirectly to mean a person who is not resident in India. “Person resident in India” is a person residing in India for more than 182 days in the Preceding Financial Year. Preceding Financial Year means the financial year, which ended on the last 31st of March. Thus for example, as on 11th June 2007, the Preceding Financial Year would be “2006-07”. FEMA also excludes person moving out of India for employment or business from category of Resident. Similarly it also excludes a person coming as tourist / visitor from the category of Resident.
• b. The residential status of a person leaving India shall be determined as follows: If a person leaves India for the purpose of employment, business or for any other purpose that indicates his intention to stay outside India for an uncertain period, then he becomes a non-resident from the day he leaves India for such purpose.
• c. The residential status of a person returning to India will be determined us follows: If a person comes to India for the purpose of employment, business or for any other purpose that indicates his intention to stay in India for an uncertain period; then he becomes a resident from the day he comes to India for such purpose.

As per the definition there is also a requirement of physical stay for more than 182 days in India in the Preceding Financial Year.

When the individual goes or stays outside India for any of the following purposes:

• For or on taking up employment outside India, or
• For carrying on outside India a business or vocation outside India, or
• For any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period.

In such cases, the person becomes a 'non-resident' irrespective of the period of his stay in India.

It is pertinent to note here that while the period of his stay in India shall be reckoned for the preceding financial year, the event of going or staying abroad for any of the aforesaid purposes shall be reckoned for the current financial year.

Who is a ‘PIO’?

PIO means a citizen of any country other than Bangladesh or Pakistan,

• a. who at any time held Indian Passport, or
• b. who or either of whose parents or any of the grandparents was a citizen of India under Constitution of India or under Indian Citizenship Act, 1955, or
• c. who is spouse of an Indian citizen or spouse of person referred to in 1 and 2 above

Who is an ‘OCI’?

• An Overseas Citizen of India (OCI) means any foreign national who was eligible to become citizen of India on 26th January 1950 or was a citizen of India on or at any time after 26th January 1950 or belong to a territory that became part of India after 15th August 1947 is eligible for registration as OCI. Minor children of such person are also eligible for OCI.
• However, if the applicant has ever been a citizen of Pakistan of Bangladesh, he/she will not be eligible for OCI.

What are the accounts that an NRI can open in India?

An NRI can open and maintain accounts in either Indian Rupees or in Foreign Currency as below:

• NRE or NRO Account in Indian Rupees (Savings Bank, Current Account or Fixed Deposit)
• FCNR (B) Account in USD, EURO, GBP, CAD, and AUD (only as a fixed deposit)
• Individuals/ entities of Pakistan nationality/ origin and entities of Bangladesh origin require the prior approval of the Reserve Bank of India.

Can a Bangladeshi/ Pakistani national or an entity owned/ controlled from Bangladesh/ Pakistan have an account in India?

• Opening of accounts by individuals/ entities of Pakistan nationality/ ownership and entities of Bangladesh ownership requires prior approval of the Reserve Bank.
• However, individuals of Bangladesh nationality can open an NRO account subject to the individual(s) holding a valid visa and valid residential permit issued by Foreigner Registration Office (FRO)/ Foreigner Regional Registration Office (FRRO) concerned.
• Further, citizens of Bangladesh/Pakistan belonging to minority communities in those countries, namely, Hindus, Sikhs, Buddhists, Jains, Parsis and Christians residing in India and who have been granted Long Term Visa (LTV) or whose application for LTV is under consideration, are permitted to open only one NRO account with an AD bank in India subject to the conditions mentioned in Notification No. FEMA 5(R)/2016-RB dated April 01, 2016, as updated from time to time. The opening of such NRO accounts will be subject to reporting of the details of the accounts opened by the concerned Authorised bank, to the Ministry of Home Affairs (MHA) on a quarterly basis as instructed vide AP (DIR Series) Circular No. 28 dated March 28, 2019.

What are the accounts that a tourist visiting India can open?

An NRO (current/ savings) account can be opened by a foreign national of non-Indian origin visiting India, with funds remitted from outside India through banking channel or by sale of foreign exchange brought by him to India. The balance in the NRO account may be paid to the account holder at the time of his departure from India provided the account has been maintained for a period not exceeding six months and the account has not been credited with any local funds, other than interest accrued thereon.

Can persons resident in Nepal and Bhutan have accounts in India?

Persons resident in Nepal and Bhutan can open Indian rupee accounts with an authorised dealer in India.

Whether an NR account be opened or maintained along with Resident Indian (Domestic) account?

• The current resident Indian account must be closed or converted into NRO account in order to open an NR account, a domestic account cannot be maintained by an NRI.
• To convert existing domestic account to NRO account, a request letter for converting the existing resident SB account into NRO has to be submitted to Branch along with copy of stamped page of immigration on the passport (port of exit and port of entry)

What is Resident Foreign Currency Account?

NRIs / PIOs who have returned to India for permanent settlement (Returning Indians) can park their funds in Resident Foreign Currency Account which is maintained in the form of a fixed deposit. These deposits carry interest rates as payable on FCNB deposits.

What are the type of funds that can be deposited in NRO account?

• Foreign Currency Notes brought by NRI / PIO / OCI, while visiting India. Amounts in excess of USD 5000 (or equivalent) in currency or USD 10,000/- (or equivalent) in Travelers cheques should be accompanied by a Currency Declaration Form
• Interest, dividend and maturity proceeds of investments made in India on non-repatriable basis
• Transfer from another Resident Indian / NRE / NRO / FCNR (B) account
• Inward remittance from abroad
• Cheques drawn on foreign banks

What are the type of funds that can be deposited in NRE account?

• Foreign Currency Notes brought by NRI / PIO / OCI, while visiting India. Amounts in excess of USD 5000 (or equivalent) in currency or USD 10,000/- (or equivalent) in Travelers cheques should be accompanied by a Currency Declaration Form
• Transfer from another NRE / FCNR (B) account
• Transfer from another NRO account (subject to limit)
• Inward remittance from abroad
• Cheques drawn on foreign bank

Difference between NRE and NRO accounts

• The interest income earned on NRO attracts income tax deduction at source in India, whereas interest income in NRE is tax free in India.
• Balances held in NRE accounts can be fully repatriated abroad, whereas funds in NRO account are partially repatriable (up to USD 1 million per financial year), subject to payment of taxes, in few cases.
• Overseas earnings can be deposited in NRE account whereas in NRO account earnings from overseas as well as Indian sources can be deposited.

Tenor of NR Fixed Deposits

Whether NRE / NRO / FCNR (B) account be opened jointly?

NRE and FCNR may be held jointly in the names of two or more NRIs/ PIOs.

NRIs/ PIOs can hold jointly with a resident relative on ‘former or survivor’ basis (relative as defined in Companies Act, 2013). The resident relative can operate the account as a Power of Attorney holder during the life time of the NRI/ PIO account holder.

In case of NRO, a joint account with Resident Indian (RI) who is a close relative can also be opened subject to following conditions:
Mode of operation permitted is 'Former (NRI) or Survivor' only. The NRI (PIO / OCI) will be the primary/first account holder in the joint account and RI will be the second applicant.

Whether nomination facility is available in NRO / NRE / FCNR (B) account?

Yes, nomination facility is available for NRO / NRE / FCNR (B) / RFC accounts. Nomination can be added, changed or cancelled as per the choice of customer anytime.

Whether any Resident Indian be authorized to operate the NRE / NRO / FCNR (B) account

Yes, the NRI can authorize resident Indian to operate your account by way of Power of Attorney (POA).

What are the activities mandated through Power of Attorney Holder with respect to NRE / NRO / FCNR (B) account?

For NRE accounts, Operations in the account in terms of Power of Attorney is restricted to withdrawals for permissible local payments or remittance to the account holder himself through normal banking channels.

For NRO accounts, Operations in the account in terms of Power of Attorney is restricted to withdrawals for permissible local payments in rupees, remittance of current income to the account holder outside India or remittance to the account holder himself through normal banking channels. While making remittances, the limits and conditions of Repatriability will apply.

Whether funds can be transferred between NRE and FCNR (B) accounts?

Yes, the funds can be freely transferred between NRE and FCNR (B) accounts.

Whether funds can be transferred from NRE to NRO account?

• Transfer from NRE to NRO: Transfer of funds from NRE to NRO account is permitted. Once you transfer funds from NRE to NRO account, the funds become conditionally-repatriable (up to USD one million or equivalent per financial year), subject to payment of taxes, as applicable.
• Transfer from NRO to NRE: Transfer of funds from NRO to NRE account is permitted within the overall ceiling of USD one million or equivalent per financial year (April - March), subject to payment of taxes, as applicable.

What is the limit under which funds can be repatriated or sent overseas from NRE / NRO / FCNR (B) account?

Funds from NRE / FCNR (B) deposits accounts are fully repatriable without any upper limit, whereas funds from NRO account are partially repatriable (up to USD 1 million per financial year).

What is an Inoperative account?

The Savings or Current account becomes inoperative, if there is no transaction ('no credit or debit' other than crediting of monthly/quarterly interest or debiting of service charges) in the account over the period of last two years.

What is the procedure to re-activate Inoperative account?

In order to reactivate the account, customer should provide KYC documents like copy of latest passport, VISA, address proof and filled-in FATCA Form and mandate to debit & credit Rs.1/- from the account.

What is the SWIFT code for BOM branch in India?

• Please quote SWIFT Code as MAHBINBBXXX
• SWIFT code for BOM Fex Centres is unique for each centre. However, all branches do not have a SWIFT code. So, if beneficiary’s account is with a BOM branch which does not have SWIFT code, then use a SWIFT code of a nearest Forex Centre branch.

When Amount is not credited though the remittance is sent from overseas?

• Please obtain details like reference number, amount, name of the bank and value date from the remitter
• Provide this information to the Forex Centre where the remittance is routed to or contact SWIFT Department at TIBD, Mumbai for knowing the status.

What is the limit under which funds can be transferred out of NRE / NRO / FCNR (B) account to beneficiary account in abroad?

• NRE / FCNR (B) account: Funds up to any limit can be transferred
• NRO account: Funds up to USD 1 million per financial year can be transferred

What is the procedure for placing request for outward remittance?

Request for outward remittance has to be placed through the home branch along with a standard form A2 in which the beneficiary details like Name of the Bank, its SWIFT code, IBAN, Sort Code (if applicable), Beneficiary name, account number and address.