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NRI Services NRI Money Transfer Property Loan Deposit Mutual Funds Insurance

RBI guidelines for NRIs investing in Bank Fixed deposits: If you want to open a repatriable account in foreign currency: NRIs and OCBs are eligible to open and maintain Foreign Currency (Non-Resident) (Banks) Accounts - [FCNR(B) accounts] with authorised dealers. Individuals / entities of Bangladesh / Pakistan nationality / ownership require approval of Reserve Bank to open NRE accounts in India. These accounts may be opened with Funds remitted from outside India through normal banking channels or Funds received in rupees by debited from the account of a non-resident bank maintained with an authorised dealer in India or Funds that are of repatriable nature in terms of the regulations made by Reserve Bank. Funds from existing NRE / FCNR accounts. Remittances from outside India for opening of or crediting to these accounts should be made in the designated currency (Pound Sterling, US Dollar, Deutsche Mark, Japanese Yen, Euro) in which the account is desired to be opened/maintained. If the remittance is received in a currency other than the designated currency (Pound Sterling, US Dollar, Deutsche Mark, Japanese Yen, Euro, including funds received in rupees by debit to the account of a non-resident bank), it would be converted into the latter currency by the authorised dealer at the risk and cost of the remitter and account should be opened / credited in only the designated currency. In case the depositor with any convertible currency other than designated currency (Pound Sterling, US Dollar, Deutsche Mark, Japanese Yen, Euro) desires to place a deposit in these accounts, authorised dealers may undertake with the depositor a fully covered swap in that currency against the desired designated currency. Such a swap may also be done between two designated currencies. These accounts may be opened only in the form of term deposit for any of the three maturity periods, viz. one year and above but less than two years, two years and above but less than three years and three years only. Joint accounts in the names of two or more non-resident individuals may be opened provided all the account holders are persons of Indian nationality or origin. Opening of these accounts by a non-resident jointly with a resident is not permissible. An account may be opened in the name of an eligible NRI during his temporary visit to India against tender of foreign currency travelers cheques or foreign currency notes and coins tendered, provided the authorised dealer is satisfied that the person has not ceased to be a non-resident. If you want to open a repatriable account in Indian currency: Non-resident Indians (NRIs) and Overseas Corporate Bodies (OCBs) are permitted to open and maintain Non-Resident (External) Rupee (NRE) Account with authorised dealers, and with banks (including cooperative banks) authorised by the Reserve Bank to maintain accounts - These accounts should be opened by the non-resident account holder himself and not by the holder of the power of attorney in India. Individuals / entities of Bangladesh / Pakistan nationality / ownership require approval of Reserve Bank to open NRE accounts in India. The accounts may be maintained in any form- example savings, current, recurring or fixed deposit account and so on. Joint accounts in the names of two or more non-resident individuals may be opened provided all the account holders are persons of Indian nationality or origin. Opening of these accounts by a non-resident jointly with a resident is not permissible. An account may be opened in the name of an eligible NRI during his temporary visit to India against tender of foreign currency travelers cheques or foreign currency notes and coins tendered, provided the authorised dealer is satisfied that the person has not ceased to be a non-resident. If you want to place a fixed deposit with a bank on a non-repatriatiable basis: Any person residing outside India (except individuals / entities of Pakistan / Bangladesh nationality / ownership) may open NRNR accounts with an authorised dealer. Accounts should be opened in Indian rupees out of the funds remitted from outside India through normal banking channels (in freely convertible currency). In the case of NRIs / OCBs, such accounts may also be opened by transfer of funds from their existing NRE / FCNR deposit accounts. Premature withdrawal of NRE / FCNR deposits for opening NRNR deposits with an authorised dealer other than the one with whom the NRE / FCNR account is maintained will attract penalty, if any, as per the directions issued by Reserve Bank from time to time. The deposits may be held for periods ranging from 6 months to 3 years. Banks are free to determine the rate of interest on deposits under this scheme and on advances against funds held in such deposits. Only Interest accrued on the deposits is repatriable. The principal amount of deposit together with interest accrued thereon may be renewed for a further period ranging from 6 months to 3 years. If the interest accrued on an existing deposit is invested under the Scheme, the amount of interest so invested, will not be eligible for repatriation. The account can also be shifted from one authorised dealer to another. In the case of individual deposit holder, the amount of deposit can be gifted to any resident / non-resident or to any Charitable Trust in India recognised under the Income Tax Act, 1961. Account may be held jointly with residents. An authorised dealer may register nomination in favour of either a resident or non-resident. However, nomination in favour of a non-resident may be registered subject to the condition that the amount standing to the credit of the depositor, in the event of his death, will be paid to the non-resident nominee only in Indian rupees by crediting the amount to the nominee's NRO / NRNR / NRSR account and will not be allowed to be remitted outside India. In the case of non-residents only, interest on these deposits is exempt from income tax in India under section 10(15)(i). Notification No. S.O. 653(E) dated 31-8-92 Non-resident Indians (NRIs) and Overseas Corporate Bodies (OCBs) are permitted to open and maintain Non-Resident (External) Rupee (NRE) Account with authorised dealers, and with banks (including cooperative banks) authorised by the Reserve Bank to maintain such accounts. These accounts should be opened by the non-resident account holder himself and not by the holder of the power of attorney in India. Individuals / entities of Bangladesh / Pakistan nationality / ownership require approval of Reserve Bank to open NRE accounts in India. The accounts may be maintained in any form, e.g. savings, current, recurring or fixed deposit account etc. Joint accounts in the names of two or more non-resident individuals may be opened provided all the account holders are persons of Indian nationality or origin. Opening of these accounts by a non-resident jointly with a resident is not permissible. An account may be opened in the name of an eligible NRI during his temporary visit to India against tender of foreign currency travellers cheques or foreign currency notes and coins tendered, provided the authorised dealer is satisfied that the person has not ceased to be a non-resident. If you want to open a regular NRO account on non-repatriable basis: Any person resident outside India may open NRO account with an authorised dealer or an authorised bank for the purpose of putting through bona fide transactions in rupees not involving any violation of the provisions of the Act, rules and regulations made there under. When a person resident in India leaves India for a country (other than Nepal or Bhutan) for taking up employment, or for carrying on business or vocation outside India or for any other purpose indicating his intention to stay outside India for an uncertain period, his existing account would be designated as a Non-Resident (Ordinary) account. At the time of opening of the account, the account holder should furnish an undertaking to the authorised dealer / authorised bank with whom the account is maintained that in cases of debits to the account for the purpose of investment in India and credits representing sale proceeds of investments, he will ensure that such investments / disinvestments will be in accordance with the regulations made by Reserve Bank in this regard. Individuals / entities of Bangladesh / Pakistan nationality / ownership require approval of Reserve Bank to open NRE accounts in India. Post Offices in India may maintain savings bank accounts in the names of persons resident outside India and allow operations on these accounts subject to the same terms and conditions as are applicable to NRO accounts maintained with an authorised dealer/authorised bank. NRO accounts may be opened / maintained in the form of current, savings, recurring or fixed deposit accounts. The requirements laid down in the directives issued by Reserve Bank in regard to resident accounts shall apply to NRO accounts. NRO accounts may be held jointly with residents. If you want to open a regular NRSR account on non-repatriable basis: NRIs (other than nationals of Bangladesh/Pakistan) who voluntarily undertake not to seek remittance of funds held in these accounts as also income earned thereon are eligible to maintain NRSR accounts with an authorised dealer. These accounts shall carry the same facilities and restrictions as are applicable to domestic accounts of residents in respect of repatriation of funds held in the account and / or income accrued thereon with an exception of investment in shares / securities or immovable property or agricultural / plantation activities or real estate business in India which shall be governed by the regulations applicable to such investments by non-residents. The directives issued by Reserve Bank in regard to domestic accounts shall be applicable to these accounts. For the purpose of opening of these accounts, an application shall be submitted to an authorised dealer in Form NRSR appended to this Schedule. These accounts may be maintained in the form of current, savings, recurring or fixed deposit account. When a person residing in India becomes a resident outside India (other than Nepal and Bhutan) on account of him taking up employment, or carrying on business or vocation outside India or for any other purpose indicating his intention to stay outside India permanently or for an uncertain period, the person concerned will have the option of designating his existing domestic account as NRO account or NRSR account. Operating your NRO account: The operations of these accounts are substantially liberalised and do not require RBI permissions in case of the following transactions: The operations on the accounts should not result in the account holder making available foreign exchange to any person residing in India against reimbursement in rupees or in any other manner. The following credits are permitted in NRO accounts: Proceeds of remittances received in any permitted currency from outside India through normal banking channels or any permitted currency tendered by the account-holder during his temporary visit to India or transfers from rupee accounts of nonresident banks. Legitimate dues in India of the account holder. The following debits are permitted in NRO accounts: All local payments in rupees including payments for investments subject to compliance with the relevant regulations made by the Reserve Bank. Remittance outside India of current income in India of the account holder. Balances in NRO accounts are not eligible for remittance outside India without the approval of Reserve Bank. Funds received by way of remittances from outside India in foreign exchange, which have not lost their identity as remittable funds, will only be considered by Reserve Bank for remittance outside India. In case the account (current / savings) is opened by a foreign tourist visiting India, with funds remitted from outside India in a specified manner or by sale of foreign exchange brought by him to India, authorised dealers may convert the balance in the account at the time of departure of the tourist from India into foreign currency for payment to the account holder 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. NRO accounts may be re-designated as resident rupee accounts on the return of the account holder to India for taking up employment, or for carrying on business or vocation or for any other purpose indicating his intention to stay in India is for an uncertain period. Where the account holder is only on a temporary visit to India, the account should continue to be treated as non-resident during such visit. A bank may pay interest on an overdue term deposit from the date of maturity, provided that a part or whole of the deposit is renewed at the rate of interest prevailing on the date of maturity of the original deposit. The amount due / payable to non-resident nominee from the account of a deceased account holder, shall be credited to NRO account of the nominee with an authorised dealer / authorised bank in India. If premature withdrawal takes place due to death of the depositor no penalty shall be levied and interest shall be receivable at the contracted rate upto the date of withdrawal. In case of death of the depositor before maturity of the deposit, and the deposit is claimed after the maturity period, interest shall be receivable at the contracted rate for a period upto the date of maturity and at simple interest rate for the period from the date of maturity to the date of withdrawal of the deposit. However, in case of death of the depositor after maturity of the deposit, no interest shall be payable after the date of maturity. Operating your NRSR account: The operations on NRSR accounts may be allowed freely as in the case of domestic accounts maintained by resident individuals. The account holders are also permitted to freely transfer funds from NRO / NRE / FCNR accounts to NRSR accounts but not vice versa. These accounts may be held jointly with residents. The interest rates as applicable to resident accounts shall apply to these accounts. A bank may pay interest on an overdue term deposit from the date of maturity, provided that a part or whole of the deposit is renewed at the rate of interest prevailing on the date of maturity of the original deposit. Interest earned on NRSR account cannot be repatriated. An authorised dealer may register nomination in favour of either a resident or a non-resident. However, a non-resident nominee will not be entitled to any remittance facility out of funds held in NRSR account of the deceased account holder or income / interest accrued thereon. If premature withdrawal takes place due to death of the depositor no penalty shall be levied and interest shall be receivable at the contracted rate upto the date of withdrawal. In case of death of the depositor before maturity of the deposit, and the deposit is claimed after the maturity period, interest shall be receivable at the contracted rate for a period upto the date of maturity and at simple interest rate for the period from the date of maturity to the date of withdrawal of the deposit. However, in case of death of the depositor after maturity of the deposit, no interest shall be payable after the date of maturity. Operating your NRE account: The operations of these accounts are substantially liberalised and do not require RBI permissions in case of the following transactions: Proceeds of remittances to India in any permitted currency Proceeds of personal cheques drawn by you on your foreign currency account Proceeds of travellers cheques, bank drafts payable in any permitted currency including instruments expressed in Indian rupees for which reimbursement will be received in foreign currency, deposited by you in person during his temporary visit to India, provided the authorised dealer / bank is satisfied that you are still resident outside India, the travellers' cheques / drafts are valid / endorsed in your name and in the case of travellers' cheques, they were issued outside India. Proceeds of foreign currency / bank notes tendered by you during your temporary visit to India, provided the amount was declared on a Currency Declaration Form (CDF), where applicable. The notes are tendered to the authorised dealer in person by the account holder himself and the authorised dealer is satisfied that account holder is a person resident outside India. Transfers from other NRE / FCNR accounts. Interest accruing on the funds held in the account. Interest on Government securities and dividend on units of mutual funds, provided the securities / units were purchased by debit to your NRE / FCNR account or out of inward remittance through normal banking channels. Maturity proceeds of Government securities including National Plan / Savings Certificates as well as proceeds of Government securities and units of mutual funds sold on a recognised stock exchange in India and sale proceeds of units received from mutual funds, provided the securities / units were originally purchased by debit from your NRE / FCNR account or out of remittances received from outside India in free foreign exchange. Refund of share / debenture subscriptions to new issues of Indian companies or portion thereof, if the amount of subscription was paid from the same account or from your other NRE / FCNR account or by remittance from outside India through normal banking channels. Refund of application / earnest money made by the house building agencies on account of non-allotment of flat / plot, together with interest, if any (net of income tax payable thereon), provided the original payment was made out of your NRE / FCNR account or remittance from outside India through normal banking channels and the authorised dealer is satisfied about the genuineness of the transaction Any other credit if covered under general or special permission granted by Reserve Bank. The following debits are permitted in NRE accounts: Local disbursements Remittances outside India Transfer to your NRE / FCNR accounts or any other person eligible to maintain such account Investment in shares / securities / commercial paper of an Indian company or for purchase of immovable property in India provided such investment / purchase is covered by the regulations made, or the general / special permission granted, by the Reserve Bank. Any other transaction if covered under general or special permission granted by the Reserve Bank. NRE accounts would be re-designated as resident accounts or the funds held in these accounts would be transferred to the RFC accounts (if the you are eligible for maintaining RFC account) at your option immediately upon your return India for taking up employment or for carrying on business or vocation or for any other purpose indicating your intention to stay in India for an uncertain period. Where you are only on a short visit to India, the account may continue to be treated as NRE account even during your stay in India. Where the term deposit matures on a Saturday/Sunday, holiday or a non-working day, interest shall be payable at the contracted rate for that day upto payment of proceeds of the deposit on the next working day. Authorised dealers / authorised banks may allow remittance of funds lying in the NRE account of the deceased account holder to his non-resident nominee. Joint accounts in the names of two or more non-resident individuals may be opened provided all the account holders are persons of Indian nationality or origin. When one of the joint holders becomes resident, the authorised dealer may either delete his name and allow the account to continue as a NRE account or re-designate the account as a resident account, at your option. Authorised dealers / authorised banks allow operations on an NRE account in terms of Power of Attorney or other authority granted in favour of a resident by the non-resident account holder, provided such operations are restricted to withdrawals for local payments. In cases where you or a bank designated by you is eligible to make investments in India, the Power of Attorney holder may be permitted by authorised dealers to operate the account to facilitate such investment. The resident Power of Attorney holder shall not, however, be allowed to repatriate funds outside India held in the account under any circumstances or make payment by way of gift to a resident on behalf of you or transfer funds from the account to another NRE account. Conversion of NRE deposits into FCNR(B) deposits or vice-versa before maturity will attract penalty. No penalty shall be levied on premature withdrawal of NRE deposit for conversion into an RFC deposit. Where the deposit is withdrawn before six months, banks may pay interest at a rate not higher than the savings deposits held in RFC accounts, provided the NRE account holder has made a request for conversion immediately on his arrival in India. Application from a resident nominee for remittance of funds outside India for meeting the liabilities, if any, of the deceased account holder or for similar other purposes, should be forwarded to the Reserve Bank for consideration. The bank , at its discretion, may renew an overdue deposit entirely or partly, provided the overdue period from the date of maturity till the date of renewal does not exceed 14 days. The rate of interest receivable on the amount of the deposit renewed shall be the rate prevailing on the date of maturity or on the date of renewal, whichever is lower. In case of overdue deposits where the overdue period exceeds 14 days and the depositor places the entire amount of overdue deposit or a portion thereof as a fresh NRE deposit, banks can fix their own interest rates for the overdue period on the amount so placed as a fresh term deposit. Banks shall have freedom to recover the interest so paid for the overdue period if the deposit is withdrawn before completion of minimum stipulated period under the scheme, after renewal. Income from interest on balances standing to the credit of NRE Accounts is exempt from Income Tax. Likewise balances held in such accounts are exempt from wealth tax. Operating your FCNR account: You can deposit funds in FCNR (B) accounts in Pound Sterling, US Dollar, Deutsche Mark, Japanese Yen, and Euro. Keep in mind that deposits in Deutsche Mark will not be accepted from December 31, 2001 and the maturity proceeds on Deutsche Mark, after this date shall be payable only in Euro. The deposits cannot be held or renewed for a period exceeding three years. Banks can determine the rate of interest on funds held in these deposit accounts. However, they cannot offer differential interest rates for deposits received on the same date, for the same maturity period. Interest rates may vary according to the size of the deposit, subject to the overall ceiling prescribed. Interest paid by the bank has to be as per schedule and is not subject to negotiation. The following credits are permitted in FCNR (B) accounts: Proceeds of remittances to India in any permitted currency Proceeds of personal cheques drawn by you on your foreign currency account Proceeds of travellers cheques, bank drafts payable in any permitted currency including instruments expressed in Indian rupees for which reimbursement will be received in foreign currency, deposited by you in person during your temporary visit to India, provided the authorised dealer / bank is satisfied that you are still resident outside India, the travellers' cheques / drafts are standing / endorsed in your name and in the case of travellers' cheques, they were issued outside India. Proceeds of foreign currency / bank notes tendered by you during your temporary visit to India, provided the amount was declared on a Currency Declaration Form (CDF), where applicable, and the notes are tendered to the authorised dealer in person by the account holder himself and the authorised dealer is satisfied that account holder is a person resident outside India. Transfers from other NRE / FCNR accounts. Interest accruing on the funds held in the account. Interest on Government securities and dividend on units of mutual funds, provided the securities / units were purchased by debit to your NRE / FCNR account or out of inward remittance through normal banking channels. Maturity proceeds of Government securities including National Plan / Savings Certificates as well as proceeds of Government securities and units of mutual funds sold on a recognised stock exchange in India and sale proceeds of units received from mutual funds, provided the securities / units were originally purchased by amounts debited from your NRE / FCNR account or out of remittances received from outside India in free foreign exchange. Refund of share / debenture subscriptions to new issues of Indian companies or portion thereof, if the amount of subscription was paid from the same account or from your other NRE / FCNR account or by remittance from outside India through normal banking channels. Refund of application / earnest money made by the house building agencies on account of non-allotment of flat / plot, together with interest, if any (net of income tax payable thereon), provided the original payment was made out of your NRE / FCNR account or remittance from outside India through normal banking channels and the authorised dealer is satisfied about the genuineness of the transaction. Any other credit if covered under general or special permission granted by Reserve Bank. The following debits are permitted in FCNR (B) accounts: Local disbursements. Remittances outside India. Transfer to your NRE / FCNR accounts or any other person eligible to maintain such account. Investment in shares / securities / commercial paper of an Indian company or for purchase of immovable property in India provided such investment / purchase is covered by the regulations made, or the general / special permission granted, by the Reserve Bank. Any other transaction if covered under general or special permission granted by the Reserve Bank. Remittances received in Indian rupees for opening these accounts would be converted by the authorised dealer into the designated foreign currency (Pound Sterling, US Dollar, Deutsche Mark, Japanese Yen, Euro) at the clean T.T. selling rate for that currency ruling on the date of conversion. For the purpose of payment in rupees, funds held in these accounts shall be converted into rupees at the authorised dealer's clean T.T. buying rate for the concerned currency ruling on the date of withdrawal. Any inland movement of funds for the purpose of opening these accounts as well as for repatriation outside India of balances held in these accounts will be free of inland exchange or commission for the non-resident depositors. The Authorised dealer receiving foreign currency remittances in these accounts will also, on request, pass on the foreign currency to another authorised dealer if the account has to be opened with the latter, at no extra cost to you. Interest on balances held in these accounts can be received half-yearly or on an annual basis as desired by you. Interest may be credited to a new FCNR (B) account or an existing / new NRE / NRO / NRNR / NRSR account in your name, at your option. Where the term deposit matures on a Saturday/Sunday, holiday or a non-working day, interest shall be payable at the contracted rate for that day upto payment of proceeds of the deposit on the next working day. Your deposits can continue till maturity at the contracted rate of interest, if so desired by you, even if your residential status changes to a person residing in India. However, except the provisions relating to rate of interest applicable to the FCNR (B) deposits, for all other purposes such deposits shall be treated as resident deposits from the date of your return to India. Authorised dealers will convert the FCNR (B) deposits on maturity into resident rupee deposit accounts or RFC account (if you are eligible to open RFC account), and interest on the new deposit (rupee account or RFC account) shall be payable at the rates not exceeding the rate payable on savings bank deposits. No penalty shall be levied on premature conversion of FCNR(B) deposits into RFC deposits, on return of non-residents to India. Joint accounts in the names of two or more non-resident individuals may be opened provided all the account holders are persons of Indian nationality or origin. When one of the joint holders becomes resident, the authorised dealer may either delete his name and allow the account to continue as a FCNR (B) account or re-designate the account as a resident account, at the option of the account holders. Additions or deletions to the name(s) of joint holders is permissible on request of all joint holders. Authorised dealers / authorised banks allow operations on an FCNR account in terms of Power of Attorney or other authority granted in favour of a resident by the non-resident account holder, provided such operations are restricted to withdrawals for local payments. In cases where you or a bank designated by you is eligible to make investments in India, the Power of Attorney holder may be permitted by authorised dealers to operate the account to facilitate such investment. The resident Power of Attorney holder shall not, however, be allowed to repatriate outside India funds held in the account under any circumstances or make payment by way of gift to a resident on behalf of you or transfer funds from the account to another NRE account. Application from a resident nominee for remittance of funds outside India for meeting the liabilities, if any, of the deceased account holder or for similar other purposes, should be forwarded to the Reserve Bank for consideration. Premature withdrawal of FCNR(B) deposits will attract penalty as per the directions issued by Reserve Bank from time to time. Conversion of FCNR(B) deposits into NRE deposits or vice-versa before maturity will also attract penalty. If premature withdrawal takes place due to death of the depositor no penalty shall be levied and interest shall be receivable at the contracted rate upto the date of withdrawal. In case of death of the depositor before maturity of the deposit, and the deposit is claimed after the maturity period, interest shall be receivable at the contracted rate for a period upto the date of maturity and at simple interest rate (applicable on date of maturity) for the period from the date of maturity to the date of withdrawal of the deposit. However, in case of death of the depositor after maturity of the deposit, interest shall be receivable at a rate applicable to savings deposit rate under RFC account (applicable on date of maturity) for a period from the date of maturity to the date of withdrawal. The bank may, at its discretion, renew an overdue deposit entirely or partly provided the overdue period from the date of maturity till the date of renewal does not exceed 14 days and the rate of interest receivable on the amount of the deposit so renewed shall be the rate prevailing on the date of maturity or on the date of renewal, whichever is lower. In the case of overdue deposits where the overdue period exceeds 14 days and the depositor places the entire amount of overdue deposit or a portion thereof as a fresh FCNR (B) deposit, banks can fix their own interest rates for the overdue period on the amount so placed as a fresh term deposit. Banks have freedom to recover the interest so paid for the overdue period if the deposit is withdrawn before completion of minimum stipulated period under the scheme, after renewal.