Banking for Non Resident Indians in India
Overview of NRI Banking in India:-
1990s was the period that witnessed noticeable change in banking sector in India. It was called simply called ‘liberalization’. This brought in a whirlwind of cascading changes that affected even the act related to foreign exchange in India. The FERA (Foreign Exchange Regulations Act) that regulated foreign exchange in India was changed to FEMA(Foreign Exchange Management Amendments) by 1999. This is the act that governs foreign exchange in India and also regulates banking sector for Non Resident Indians in India.
Non Resident Indian Bank Accounts in India:-
An NRI before opening an account in a bank has to know whether the bank is an authorized dealer of Non Resident Indian banking accounts. There are about 3 types of accounts that a Non Resident Indian can open in Indian banks today i.e.
1. Non Resident External (Rupee) account– NRE
NRE A/cs can be maintained in either savings, fixed or current accounts. The balances are completely repatriable. Any income earned in this account or balances do not attract income tax or wealth tax. The balances can be transferred to/ from other NRE/ FCNR(B) a/cs from/ into this account.
2. Non Resident Ordinary (Rupee) account– NRO
NRO A/cs can be maintained in either savings, fixed or current accounts. The balances in this account are repatriable only to the extent of Rs.1 million US dollars in a financial year subject to some regulations. Any income received in this account is subject to income tax and is deducted at source. The funds received into this account can be from acceptable banking channels. Funds held in NRE/FCNR(B) a/cs cannot be transferred into/from an NRO a/c.
A foreign tourist visiting India can also open an NRO a/c and can repatriate all the balances in the a/c provided the a/c is closed within 6 months.
3. Foreign Currency Non Resident (Bank) account – FCNR (B)
FCNR(B) deposits can be held only in the form of fixed deposits ranging from 1 to 5 years. The account can be held in US dollar, Canadian dollar, Australian dollar, Pound Sterling, Euro and Japanese Yen. The account holder can convert any other currency he has, into the acceptable currency for deposits.
General features of NRI banking accounts:-
- Loan facility is available to NRI for the purpose of housing, car and also personal loans are available against deposits or other forms of securities.
- Bank overdraft facility is provided to NRI accounts.
- Joint account holding facility is available and is subjected to conditions.
- Nomination facilities are available to NRE, NRO, and FCNR (B), accounts.
- Power of Attorney can be held over an account but his rights of operation over the account are limited.
- On the return of NRI to India the account will be converted into regular Indian accounts (like RFC) and will function with previous rate of interest if the deposit has not reached its maturity.
- All features are mentioned on a generalized basis and features of each account are regulated by RBI from time to time.
Documents required for opening an NRI banking account:-
- The documents mentioned below are in general. The bank may demand for other specific documents depending on the bank and type of account.
- Passport size photograph with a signature across the photo
- Utility bills, photocopy of passport with foreign residence address, photocopy of driving license or any relevant document as a proof of address to foreign residence
- Photocopy of passport
- Photocopy of Visa
- All the copies will have to be attested by Embassy of India or any other overseas banker.
Providers of NRI banking accounts in India:-
- ICICI
- Axis bank
- HDFC
- HSBC
- SBI
- CITI bank
- Standard Chartered bank
- Canara bank
Contributed By: Aruna Sharma |
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Mrs. Sharma holds a Masters in Financial Management from University of Mumbai. She has graduated from the University of Mumbai. | |
- krishna kumar Gopi:I want to open NRI A/C How do i do it?15-Jul-2013 10:34 PMReply
- Ravi Yeole:IF NRI PERSONALLY VISITED OUR BRANCH FOR OPENING NRE A/C AT MUMBAI WITH ORIGINAL PASSPORT,DO WE REQUIR STILL REQUIRE THE PASSPORT COPY TO BE ATTESED BY EMBASSY OF INDIA OR ANY OTHER OVERSEAS BANKER. PL ALSO PROVIDE US FORMAT FOR THE POWER OF ATTORNEY25-Aug-2012 01:05 PM
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