FEMA
  • Liberalized Remittance Scheme (LRS)
  • Borrowing And Lending
  • Acquisition and Transfer of Immovable Property – FEMA
  • Banking Accounts

Which are permissible current account transactions under the LRS?

Ans. The following are the permissible current account transactions under LRS
- Private Visit (other than Nepal and Bhutan)
- Gift or Donation
- Going abroad for employment
- Emigration
- Maintenance of close relatives abroad
- Travel for business
- Medical treatment abroad
- Studies abroad
- Any other current account transaction


Which are permissible Capital account transactions under the LRS?

Ans. The following are the permissible current account transactions under LRS:
- Opening of foreign currency a/c abroad
- Purchase of property abroad
- Making investments abroad
- Setting up Wholly owned subsidiaries and Joint Venture abroad
- Extending loans in INR to NRIs who are relatives.

Which current account transactions are the exceptions for which amount in excess of USD 2,50,000/- can be availed?

Ans. Individual may avail of exchange facility in excess of USD 250,000/- as prescribed under LRS in connection with Emigration, medical treatment abroad and studies abroad, subject to other prescribed conditions/ restrictions.

What remittances are permissible under LRS for persons other than RI?

Ans. Persons other than RI can make remittances for:
- Donations for educational institutions;
- Commissions to agents abroad for sale of residential flats/commercial plots in India;
- Remittances for consultancy services and
- Remittances for reimbursement of pre-incorporation expenses within the limit and conditions laid down therein.
Such persons shall submit to the AD Bank a declaration to the effect that the limits and conditions relating to the remittances have been complied with.  

Is the LRS in addition to the use of International Credit Card by a resident?

Ans. Yes, LRS is in addition to the use of International Credit Card. There is no monetary ceiling fixed by RBI for remittances by use of International Credit Card towards meeting expenses while such person is on a visit outside India. Use of International Credit Card for payment in foreign exchange in Nepal and Bhutan is not permitted.

Is there any frequency for the remittance?

Ans. There is no restriction on the frequency. However, the total amount of foreign exchange purchased from or remitted through, all sources in India under the LRS scheme during the current FY should be within the LRS limit currently at USD 250,000/-.

Who is eligible to remit funds outside India under LRS?

Ans. RIs are eligible to avail benefit of LRS. The person must be a person resident in India as per FEMA. Once an individual is a resident under FEMA, he is eligible to avail benefits of LRS, whether or not he is an Indian citizen. Persons other than RIs are eligible to avail benefits of LRS but only for few transactions subject to limits and conditions as specified in FEMA. 

Can a remittance under the LRS be made by a minor?

Ans. Yes, LRS facility is available to all RIs including minors. In case of remitter being a minor, the Form A2 must be countersigned by the minor’s natural guardian.

To whom is LRS facility not available?

Ans. LRS is not available to corporates, partnership firms, HUF, Trusts, etc.

A UK passport holder and British Citizen (not of Indian origin), is permanently residing in India for carrying on business. Will he be eligible for availing the LRS even though he is not an Indian citizen?

Ans. Since he is carrying on business in India, he shall be treated as a person resident in India under FEMA. Hence, he would be eligible for availing the LRS even though he is not an Indian citizen.

An Indian passport holder is residing in Singapore for his employment since the last 20 years. Will he be eligible for availing LRS even though he is an Indian citizen?

Ans. Since he has left India for employment purpose, hence he shall be treated as a person resident outside India under FEMA. He would not be eligible for availing LRS even though he is an Indian citizen.

Can remittances under LRS be consolidated in respect of family members?

Ans. Remittances under LRS can be consolidated in respect of family members (including minors) subject to the individual family members complying with the terms and conditions of the Scheme. However, clubbing is not permitted by other family members for capital account transactions such as opening a bank a/c/ investment/ purchase of property, if they are not the co-owners/ co-partners of the overseas bank a/c, investment/ property.

Is it mandatory for RI to have PAN for sending outward remittance under the scheme?

Ans. It is mandatory to have PAN card to make remittances under LRS for capital account transactions. However, PAN card need not be required for remittances made towards permissible current account transactions up to USD 25,000/-.

What is not permitted under the LRS?

Ans. All other transactions which are otherwise not permissible under FEMA and those in the nature of remittance for margins or margin calls to overseas exchanges / overseas counterparty are not allowed under the Scheme.

Are RI under LRS required to repatriate back to India the accrued interest/ dividend on deposits/ investments abroad, over and above the principal amount?

Ans. The RI investors can retain and re-invest the income earned on investments made under LRS. At present the RIs are not required to repatriate the funds or income generated out of the investments made abroad under LRS.

A RI, intends to give loan abroad by using LRS? Can he do so?

Ans. Yes, a RI can give loan to relatives as defined under the Companies Act abroad by using LRS as giving of loans is a permissible capital account transaction.

Can an individual, who has availed of a loan abroad while a non-resident Indian can repay the same on return to India, under LRS as resident?

Ans. Yes

A RI has gifted an amount of USD 1,50,000/- to his daughter in USA in October 2016. He intends to gift another amount of USD1,00,000/- to his son in UK before March 2017. Can he do so?

Ans. Yes, since the RI has partly utilized the limit of USD 250,000/-, he can gift an additional amount of up to USD 1,00,000/- before 31st March 2017. No further remittances shall be permitted in FY 2016-17 since the LRS limit has been utilised. 

A RI has gifted an amount of USD 250,000 to her daughter in USA in December 2016. She intends to remit additional amount of USD 50,000/- to her daughter for her maintenance before March 2017. Can she do so?

Ans. No. she cannot remit additional amount of USD 50,000/- to his daughter (a close relative) in accordance with the regulations governing current account transactions. Remittance for maintenance of close relative abroad has also been subsumed under the LRS limit. Hence, the limit of USD 250,000/- shall be applicable in case of gift to close relatives too.

A RI intends to gift another RI in foreign currency by credit to latter’s foreign currency a/c held abroad, under LRS. Can he do so?

Ans. A RI cannot gift to another RI in foreign currency, for the credit of latter’s foreign currency a/c held abroad under LRS.

What is the procedure to remit funds under the LRS?

Ans. 1. Approach the Bank and notify them that you would like to engage in an Outward Remittance via demand draft, under LRS.
2. Application cum declaration for purchase of foreign exchange under LRS of USD 250,000.
3. Form A2 will be presented to you in addition to the demand draft documentation. Form A2 is a declaration form. Under the form, you are required to attest that you have not breached the limit of USD 250,000 per FY and state the purpose of the remittance. Form 15CA/CB is not mandatory under LRS transactions.
4. Apart from above, request for release of foreign exchange is to be given to AD Bank in case of transfer of funds overseas. (Application to Release forex)
5. Other AD Bank specific requirements. 

To whom can a RI remit for the purpose of "maintenance of close relatives"?

Ans. Funds can be remitted to the below mentioned relatives as defined in the Companies Act:
1. Members of your Hindu undivided family; or
2. Resident individual’s spouse
3. Resident is related to the beneficiary in any of the manners indicated below:

- Father (including step-father)
- Mother (including step-mother)
- Son (including step-son)
- Son's wife
- Daughter
- Daughter's husband
- Brother (including step-brother)
- Sister (including step-sister)

Can a RI lend money to his close relative NRI / PIO?

Ans. Yes, a RI can lend money by way of crossed cheque /electronic transfer within the overall limit of USD 2,50,000/- per FY under LRS. The loan should be interest free and have a maturity of minimum 1 year and cannot be remitted outside India. Repayment of loan shall be made by way of inward remittances from outside India or debit to NRE/NRO/FCNR a/c of the borrower or out of the sale proceeds of shares/securities/immovable property against which such loan was granted.    

In the above case, who is responsible to ensure that the amount of loan is within the limits prescribed under LRS during the FY?

Ans. It would be the responsibility of the lender (i.e. RI) to ensure that the amount of loan is within the limits prescribed under LRS during the FY.

What are the restrictions on the end use of the funds borrowed by a relative NRI from a resident Indian?

Ans. The loan shall be utilised for meeting the borrower’s personal requirements or for his own business purposes in India. It shall not be utilised for any of the activities in which investment by persons resident outside India is prohibited, namely in:
(a) the business of chit fund, or
(b) Nidhi Company, or
(c) agricultural or plantation activities or in real estate business, or construction of farm houses, or
(d) trading in Transferable Development Rights.

Can a resident Indian who is a close relative of a NRI, borrow money in INR from NRI?

Ans. A resident Indian may borrow in rupees on non-repatriation basis from NRI close relative. Loan shall be received by way of inward remittance from outside India or out of NRE/ NRO/ FCNR/NRNR/NRSR a/c of NRI maintained with a Bank in India. The period of the loan shall not exceed 3 years and rate of interest shall not exceed 2% point over the prevailing bank rate. The borrowed amount is not permitted to be repatriated outside India.

The payment of interest, repayment of loan shall be made by credit to the NRI’s NRO a/c or NRSR a/c.

Further, to the above question are there any restrictions on end use of the borrowed funds?

Ans.

Funds borrowed in rupees from NRI close relative shall be utilized by Resident Indian for his own business purpose only other than certain specified businesses*. He is not permitted to utilize the loan funds for any investment, whether by way of capital or otherwise, in any company/ partnership firm/ proprietorship concern or any entity, or for relending.
* the business of chit fund, as Nidhi Company, agricultural or plantation activities or real estate business; or construction of farm houses, or trading in Transferable Development Rights. 
Provided that RBI may permit such resident entities/ companies to use such borrowed funds:
(a) For on lending/ re-lending to the infrastructure sector; or
(b) For keeping in fixed deposits with banks in India pending utilization by them for permissible end-uses.

Can a RI repay loans of close relative NRIs to banks in India?

Ans. Yes, where a Bank in India has granted loan to a NRI such loans may also be repaid by any relative (as defined under the Companies Act), of NRI by crediting the borrower's loan a/c through the bank a/c of such relative.

Can a NRI avail loan from a Bank in India?

Ans. Yes, NRI is permitted to avail loan from a Bank in India subject to terms and conditions specified by RBI. Banks can grant loan to NRIs against the security of shares and other securities and immovable property (other than agricultural land / plantation property / farm house).

Can NRIs obtain loan from their Banks for acquiring ESOPs?

Ans. Yes, NRIs are permitted to acquire loan from the Bank till the extent of 90% of the purchase price of the ESOPs or Rs. 20 lakhs per NRI employee whichever is lower. The loan amount shall be directly paid to the company and should not be credited to NRI’s a/c’s in India. Additional conditions have been laid down by RBI for the same.

Can a RI borrow money from his close relatives outside India?

Ans. Yes, an individual resident Indian can borrow sum not exceeding the LRS limit (current limit is USD 250,000/-) or its equivalent from his close relatives staying outside India, subject to the conditions that:
(a) the minimum maturity period of the loan is one year;
(b) the loan is free of interest; and
(c) the amount of loan is received by inward remittance in free foreign exchange through normal banking channels or by debit to the NRE/FCNR a/c of the NRI. 

A NRI wants to avail loan against her NRO/ NRE FDs. Is she permitted to do so?

Ans. She can freely avail loan/ overdraft against securities of her NRO/NRE FDs in India without any monetary ceiling. The end use of the loan amount is however specified under FEMA.

Can a resident Indian and a friend of NRI take loans against the NRO fixed deposit a/c of NRI?

Ans.

Third-party being RI, firms or companies resident in India can avail loan/overdraft against security of NRO deposits for personal/business purposes, subject to stipulated terms and conditions.
However, loan amount cannot be utilized for relending, agricultural/plantation activities or real estate business. 

When a NRI uses his credit card, will it be considered as borrowing in India?

Ans. It is clarified that use of credit card in India by a person resident outside India shall not be deemed as borrowing or lending in rupees.

Can INR loan/ overdraft granted to RI who subsequently becomes a person resident outside India be continued?

Ans. An AD Bank may allow continuance of loan/ overdraft granted to a person resident in India who subsequently becomes a person resident outside India, subject to following terms and conditions:
(a) The AD Bank is satisfied, according to his/ its commercial judgment, about the reasons to continue the loan or overdraft;
(b) The period of loan or overdraft shall not exceed the period originally fixed at the time of granting the loan/ overdraft;
(c) So long as the borrower continues to a remain a person resident outside India, the repayment shall be made either by inward remittance from outside India through normal banking channels or from the funds held in NRE/ FCNR/ NRNR/ NRO/ NRSR a/c of the borrower. 

Can INR loan be continued in the event of change in residential status of the lender?

Ans. In case INR loan was granted by a person resident in India to another person resident in India and the lender subsequently becomes a non-resident, the repayment of loan by the resident borrower should be made by credit to the NRO or NRSR a/c of the lender maintained with a bank in India, at the option of the lender.

A PIO intends to purchase an immovable property in India. Is she permitted to do so?

Ans. Under the general permission by RBI, NRIs and PIOs are permitted to purchase immovable property in India. The general permission, however, covers only purchase of residential and commercial property. NRIs and PIOs are not permitted to purchase agricultural land / plantation property / farm house in India.

Are any documents required to be filed by the above PIO with the RBI after the purchase?

Ans. PIO who has purchased residential / commercial property under general permission is not required to file any documents with the RBI.

How many residential / commercial properties can NRI / PIO purchase under the general permission?

Ans. There are no restrictions on the number of residential / commercial properties that can be purchased. However, NRI / PIO can repatriate sales proceeds of only 2 residential properties outside India. (Refer Q. s.).

Can a foreign national of non-Indian origin and resident outside India purchase immovable property in India?

Ans. No. A foreign national of non-Indian origin, resident outside India cannot purchase any immovable property in India. But, he may take residential accommodation on lease provided the period of lease does not exceed 5 years. In such cases, there is no requirement of taking any permission of or reporting to RBI. Further, he is not permitted to be a second holder to immovable property purchased by NRI / PIO. 

Can a foreign national being employed in India, and thus called a person resident in India purchase an immovable property in India?

Ans. Yes, but the person concerned would have to obtain the approvals, and fulfill the requirements if any, prescribed by other authorities, such as the concerned State Government, etc.

However, a foreign national resident in India who is a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, Macau and Hong Kong would require prior approval of the RBI. Such requests are considered by RBI in consultation with the Government of India.

Can a NRI/ PIO/ Foreign national acquire immovable property in India by way of gift?

Ans. Yes, NRIs and PIOs can freely acquire immovable property (residential and commercial properties) by way of gift either from a person resident in India, a NRI or a PIO. However they are not permitted to acquire an agricultural land / plantation property / farm house in India by way of gift.

A foreign national of Non-Indian origin resident outside India cannot acquire any immovable property in India by way of gift.

Can a non-resident inherit immovable property in India?

Ans. Yes, a person resident outside India i.e.
a. A NRI;
b. A PIO; and
c. A foreign national of non-Indian origin,
can inherit and hold immovable property in India from a person who was resident in India. However, a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan should seek specific approval of RBI.  

A non-resident has inherited an agricultural land in India from his father who was also a non-resident. Is he permitted to inherit immovable property from a Non-resident?

Ans. Yes, he is permitted to inherit agricultural land property from his father who was also a Non-resident provided the father had acquired the property in accordance with the Foreign Exchange laws in force. 

Suppose a PIO acquired agricultural land by way of inheritance, to whom can such property be transferred?

Ans. The PIO may transfer agricultural land/ farm house/ plantation property in India, by way of gift or sale to a person resident in India, who is a citizen of India. 

Can the branch / liaison office of a foreign company purchase immovable property in India?

Ans. A foreign company which has established a Branch office or Project office in India can acquire any immovable property in India, which is necessary for or incidental to carrying on such activity, subject to certain conditions. A declaration is required to be submitted to RBI, in the prescribed Form.

However, if the foreign company has established a liaison office in India, it cannot acquire immovable property. They can acquire property by way of lease not exceeding 5 years.

Further, acquisition of immovable property by entities incorporated in Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Hong Kong, Macau, Nepal and Bhutan who have set up Branch Offices or other place of business in India would require prior approval of RBI. 


In the above case, within how many days is the foreign company required to submit declaration to RBI?

Ans. The foreign company is required to file with RBI a declaration in the Form IPI within 90 days from the date of acquisition of immovable property in India. 

How can NRI / PIO make payment for purchase of residential / commercial property in India?

Ans. Payment can be made by NRI / PIO only out of funds remitted to India through normal banking channels or funds held in NRE / FCNR / NRO a/c maintained in India.

Can NRI / PIO avail housing loan from an AD or financial institutions in India?

Ans. Yes, NRI/ PIO are permitted to obtain housing loans subject to conditions listed below:
a. The quantum of loans, margin money and the period of repayment shall be at par with those applicable to housing finance provided to a person resident in India;
b. The loan amount shall not be credited to NRE/ FCNR/ NRNR a/c of the borrower;
c. The loan shall be fully secured by equitable mortgage of the property proposed to be acquired, and if necessary, also by lien on the borrower’s other asset in India;
d. The installment of loan, interest and other charges, if any, shall be paid by remittances from outside India or out of funds in NRE/ FCNR/NRNR/NRO/NRSR a/c of the borrower in India;
e. The rate of interest on the loan shall be as per directions by the RBI and/or NHB.   

What are the ways to repay housing loan availed as per the above question?

Ans. Housing loan can be repaid:
- by way of inward remittance through normal banking channel; or
- by debit to the NRE / FCNR / NRO a/c of the NRI / PIO; or
- out of rental income from such property; or
- by the borrower's  relatives, through their a/c in India by crediting the borrower's loan a/c.

Can NRI avail of housing loan in rupees from his employer in India?

Ans. Yes, subject to certain terms and conditions.

Can a NRI sell an agricultural land in India which was received by him as inheritance?

Ans. He may sell agricultural land to a person resident in India. 

In the above case, will NRI still be eligible to sell an agricultural land, in case the same was purchased by him while he was a Resident?

Ans. Yes, he is eligible to sell an agricultural land, even if the same was purchased by him while he was a Resident.

Can a NRI/ PIO gift his immovable properties?

Ans. A NRI / PIO may gift residential / commercial property to a person resident in India, a NRI or a PIO. Foreign national of non-Indian origin requires prior approval of RBI for gifting the residential / commercial property.

Gifting of agricultural land / a plantation property / a farm house situated in India:
A NRI / PIO can gift the above only to a person resident in India who is a citizen of India. A foreign national would require prior approval of the RBI.

Can residential / commercial property be mortgaged?

Ans. 1. A NRI / PIO can mortgage to:
i. An AD/ housing finance institution in India- without the approval of RBI.
ii. A party abroad- with prior approval of RBI.

2. . A foreign national of non-Indian origin can mortgage only with prior approval of RBI
3. A foreign company which has established a Branch Office or other place of business in accordance with FERA/ FEMA regulations has general permission to mortgage the property with an authorized dealer in India.

A PIO has acquired residential / commercial property in India by way of inward remittances through normal banking channel or by debit to NRE /FCNR/ NRO a/c. Can he repatriate the sale proceeds of the same? If yes, is there any limit on the quantum?

Ans. Yes, he may repatriate the sale proceeds of immovable property. The amount to be freely repatriated should not exceed the amount paid for acquisition of residential / commercial property:
(a) In foreign exchange received through normal banking channel or by debit to FCNR a/c;   or
(b) The foreign currency equivalent, as on the date of payment, of the amount paid by NRE a/c.

Also, in case of residential property, the repatriation of sale proceeds is restricted to not more than 2 such properties.
The sale proceeds of residential/ commercial property in India acquired by way of debit to NRO a/c cannot be freely repatriated and should be credited to NRO a/c only. Amount can be transferred from NRO a/c to NRE a/c/ overseas a/c subject to the limit of USD 1 million per FY.  

Is there any lock in period for sale of residential / commercial property purchased out of inward remittance / debit to NRE / FCNR a/c?

Ans. There is no lock in-period applicable for sale of such properties.

A NRI acquired an immovable property by way of gift. Can the funds received on the sale of the said immovable property be repatriated abroad?

Ans. The sale proceeds of immovable property acquired by NRI by way of gift should be credited to NRO a/c only. From the balance in the NRO a/c, NRI/PIO may remit up to USD 1 million, per FY, subject to the satisfaction of the Bank and payment of applicable taxes.

If the immovable property was received as inheritance in the above case from a person resident in India, can he repatriate the sale proceeds?

Ans. Yes, general permission is available to the NRI/PIO to repatriate the sale proceeds of the immovable property inherited from a person resident in India. The amount of repatriation is restricted to USD 1 million per FY.

In case of a foreign national, sale proceeds can be repatriated in similar manner if the property is inherited from a person resident outside India with the prior approval of RBI.

Citizen of Pakistan, Bangladesh, Sri Lanka, China, Afghanistan and Iran are required to obtain prior approval of RBI. Repatriation of sale proceeds in foreign exchange to Nepal and Bhutan is not permissible.

If the immovable property was received as inheritance by foreign national from a person resident outside India, can he repatriate the sale proceeds?

Ans. Yes, but only with a prior approval from RBI. 

Can NRI / PIO rent out the residential / commercial property purchased out of foreign exchange / rupee funds?

Ans. Yes, NRI/PIO can rent the property without RBI approval. The rent received can be credited to NRO / NRE a/c or remitted abroad. 

Can foreign nationals of non-Indian origin resident in India or outside India who had earlier acquired immovable property under FERA with specific approval of RBI continue to hold the same? Can they transfer such property?

Ans. Yes, they may continue to hold the immovable property under holding license obtained from RBI. However, they can transfer the property only with the prior approval of RBI.

A NRI holds NRO, NRE and FCNR a/c with a Bank. He intends to add his sister a resident Indian as a joint holder to his savings a/c. Is it permissible?

Ans. Yes. NRO a/c can be maintained jointly with resident of India, irrespective whether the resident is a relative (as per the Companies Act) or not. On the other hand NRE and FCNR a/c can be maintained jointly with resident relative only. 

Can the NRI’s sister operate his Bank accounts?

Ans. No. During the lifetime of the NRI, the sister shall be eligible to operate the account only if she is a POA holder as per the instructions of the NRI/ PIO account holder.
Operations in the FCNR, NRE and NRO a/c by his sister is restricted to the following:
• Withdrawals for permissible local payments including payments for eligible investments subject to relevant compliances
• Remittance to the account holder himself through normal banking channels.

Whether NRO, NRE and FCNR a/c can be opened by a resident POA holder?

Ans. NRO, NRE and FCNR a/c cannot be opened by resident POA holder in India on behalf of NRI. 

Are NRIs permitted to be joint holders to the accounts held by resident Indians?

Ans. Yes. Relatives (as per the Companies Act) who are NRIs are permitted to be joint holders in existing / new resident bank accounts with the resident account holder on “Either or Survivor” basis as per the conditions prescribed. 

Can NRI account holders avail Rupee loans in India from Banks against security of funds held in their FCNR and NRE a/c?

Ans. Yes, NRIs can avail loan from Banks, in India without any ceiling subject to usual margin requirements. The loan amount can be utilized by NRI only for the following purposes:
• Personal purposes or for carrying on business activities. The loans cannot be utilized for the purpose of ‘relending’ or for carrying on agriculture, plantation activities or for investment in real estate business.
• Capital contribution in Indian firms / companies.
• Acquisition of flat / house in India for his ‘own’ residential use. 

Can NRI account holders avail Rupee loans in India from Banks against security of funds held in their NRO a/c?

Ans. Yes. The loan can be utilized for personal and business purposes except for the purpose of ‘relending’ or for carrying on agriculture, plantation activities or for investment in real estate business.

Can NRIs avail loans outside India against security of funds held in their FCNR / NRE a/c?

Ans. Yes, NRIs can avail loan from branches / correspondent Banks outside India for bonafide purposes.

Can a NRI overdraw his NRE a/c?

Ans. Banks may at their discretion/ commercial judgement allow over drawings in NRE a/c up to a limit of Rs.50,000/- subject to the condition that such over drawings together with the interest payable thereon are cleared/repaid within a period of two weeks, out of inward remittances through normal banking channels or by transfer of funds from other NRE/FCNR a/c.

What are the permissible transactions in the NRE a/c and FCNR a/c?

Ans.

Permissible Credits

Permissible Debits

  1. Remittances to India in any permitted currency.
  2. Personal cheques drawn and deposited during temporary visit to India   
  3. Transfers from other NRE/ FCNR a/c.
  4. Interest accruing on the funds held in the account, on government securities and dividend income.
  5. Maturity proceeds of Government securities, mutual funds etc
  6. Refund of share / debenture subscriptions of Indian companies, of application / earnest money / purchase consideration from the builder / developer. 
  7. Any other credit if covered under general or special permission granted by RBI.
  1. Local disbursements.
  2. Remittances outside India.
  3. Transfer to NRE/ FCNR a/c of   the account holder or any other person.
  4. Investment in shares/ securities/ commercial paper of an Indian company or for purchase of immovable property in India.
  5. Any other transaction if covered under general or special permission granted by the RBI.

 

What are the permissible transactions in the NRO a/c?

Ans.

Permissible Credits

Permissible Debits

a)    Proceeds of remittances received in any permitted currency from outside India

b)    Permitted currency tendered during his temporary visit to India

c)    Transfers from rupee a/c of non-resident banks.  

d)    Legitimate dues in India.

e)    Amount of gift / loan received from an individual resident Indian.

a.    All local payments in rupees including payments for investment subject to compliance with the relevant regulations made by the RBI.  

b.    Remittance outside India of current income in India of the account holder net of applicable taxes.

 

What are the permissible transactions in SNRR a/c?

Ans. a. SNRR a/c can be opened only if a person resident outside India has business interest in India.
b. The debits and credits in SNRR a/c should be specific/ incidental to the business proposed to be done by the account holder.
c. Transfers from NRO a/c to SNRR a/c are prohibited.
d. The tenure of SNRR a/c should be concurrent to the tenure of the contract/ period of operations/ business of the account holder and in no case the period should exceed 7 years from the date of opening of the account.

Can the AD banks issue International Credit cards to NRIs/ PIOs without prior approval of RBI?

Ans. AD Banks can issue International Credit Cards to NRIs/ PIOs without prior approval of RBI. Such transactions may be settled by inward remittance or out of balances held in the cardholder’s NRO/ NRE/ FCNR a/c. 

Are there any disadvantages for a NRI to hold NRE a/c in India?

Ans. Disadvantage of NRE a/c for customers in that if Rupee depreciates, savings of the person converted in US $ reduces. FCNR a/c can be maintained in foreign currency.

Can foreign tourists on short visit open a bank a/c in India?

Ans. Yes. Foreign tourists of non- Indian origin during their short visit to India can open a NRO a/c (Current / Savings) with any Bank dealing in foreign exchange. Such a/c can be opened up to a maximum period of 6 months.

What credits can be made to such a/c’s?

Ans. Funds remitted from outside India through banking channel or those obtained by sale of foreign exchange brought by the tourists to India can be credited to the NRO a/c.

Can the NRO a/c be used for making local payments?

Ans. Yes. Tourists can freely make local payments through the NRO a/c. 

Can foreign tourists repatriate the balance held in their NRO a/c at the time of departure from India?

Ans. AD banks have been allowed to convert the balance in the a/c for payment to the a/c holder at the time of departure from India into foreign currency, provided the a/c has been maintained for a period not exceeding six months and the a/c has not been credited with any local funds, other than interest accrued thereon.

Can foreign nationals resident in India open a resident a/c?

Ans. Yes. Foreign nationals employed in India holding valid visas can open and maintain a resident Rupee a/c in India subject to conditions. 

Can AD Banks remit proceeds on closure of resident a/c opened by a foreign national resident in India to his overseas a/c?

Ans. Yes, AD Banks can remit proceeds of resident a/c opened by a foreign national resident in India. But AD Banks should ensure that the funds to be repatriated outside India were either received from abroad or they are repatriable in nature or permissible by RBI.

The foreign nationals employed in India holding valid visas are eligible to maintain resident a/c with an AD Bank in India. In order to facilitate such foreign nationals to collect their pending dues in India, AD Banks may, permit foreign nationals to re-designate their resident a/c maintained in India as NRO a/c on leaving the country after their employment to enable them to receive their pending bonafide dues, subject to conditions.

How much Indian currency can be brought in or take out while coming to India?

Ans. Any person resident outside India, not being a citizen of Pakistan or Bangladesh and also not a traveler coming from and going to Pakistan and Bangladesh, and visiting India may bring into India currency notes of Government of India and RBI notes up to an amount not exceeding Rs. 25,000/- while entering only through an airport.

How much foreign exchange can be brought in while visiting India?

Ans. A person coming into India from abroad can bring with him foreign exchange without any limit. However, if the aggregate value of the foreign exchange in the form of currency notes, bank notes or travellers cheques brought in exceeds USD 10,000/- or its equivalent and/ or the value of foreign currency alone exceeds USD 5,000/- or its equivalent, it should be declared to the Customs Authorities at the Airport in the CDF form, on arrival in India.