A Non-Resident Indian (NRI) can
open the following Bank accounts in India:
1.
Non
Resident Ordinary Account (NRO A/c):
Any person
resident outside India for putting through bonafide transactions in rupees is
eligible to open NRO a/c in India.
However,
individuals/ entities of Pakistan nationality/ origin and entities of
Bangladesh origin will require prior approval of the Reserve Bank of India to
open NRO a/c in India.
The key
features of NRO a/c are as under:
·
The account is
denominated in Indian Rupees
·
It can be opened and held in the form of savings,
current, recurring, fixed deposits etc.
·
It can be
jointly held with residents or other NRIs/ PIOs
·
A/c holder can
avail loan facility in India for himself or in favour of third party, against
the security of funds held in NRO a/c
·
The interest
earned on NRO a/c is taxable in India as per Indian Income-tax laws.
·
Balances held in NRO a/c is repatriable to NRE or
Overseas account upto USD One Million per Financial Year (subject to payment of
applicable taxes)
2.
Non-Resident
External Account (NRE A/c):
NRIs and PIOs are eligible to
open such a/c in India. The account should be opened by the non-resident
account holder himself and not by the holder of the Power of Attorney in India.
The key
features of NRE a/c are as under:
·
The account is denominated in
Indian Rupees
·
It can be
opened and held in the form of savings, current, recurring, fixed deposits etc.
·
It can be
jointly held with other NRI(s) or a close relative who may be a resident
·
A/c holder can
avail loan facility for himself or in favour of third party, in India and
outside India, against the security of funds held in NRE account
·
The interest
earned on NRE a/c is exempt from Tax as per Indian Income Tax laws. Hence, no
tax is deducted at source on such interest earned.
·
Funds are
freely repatriable outside India from such an account.
3.
Foreign
Currency Non Resident (Bank) Account – FCNR (B) Account:
NRIs and PIOS are eligible to
open and maintain FCNR (B) Deposit in India.
The key features of FCNR a/c
are as under:
· The account is denominated in
any permitted currency i.e. foreign
currency which is freely convertible
·
It can only be opened only as
Term Deposit with maturity of 1-5 years
·
It can be jointly held with other NRI(s) or a close relative
who may be a resident
·
A/c holder can
avail loan facility for himself or in favour of third party, in India and
outside India, against the security of funds held in FCNR(B) a/c
·
Interest income from FCNR
account is exempt as per Indian Income Tax
laws in case of a person whose Residential Status under the Income
Tax Act, 1961 is Non-Resident or Resident but not Ordinarily Resident
·
The funds are freely
repatriable, without any restriction
- Updated 01/2024