• General
• Rupee Accounts
• Foreign Currency Accounts

Yes. Accounts can be maintained by NRIs in rupees as well as in foreign currency. Accounts in foreign currencies can, however, be maintained with authorised dealers only.

Banks holding authorised dealers' licences (i.e. banks authorised to deal in foreign exchange) or banks specifically authorised in this behalf by Reserve Bank can only maintain accounts in the names of NRIs. Certain Co- operative/commercial banks (referred to as authorised banks) have been specifically permitted to maintain accounts of NRIs expressed in rupees even though they are not authorised dealers.

Debits for local payments/investments are allowed freely. Credits to an account, of funds emanating from a local source would be permissible only if the funds are of a repatriable nature i.e. eligible to be remitted abroad.

Yes. Banks maintaining the accounts have been authorised to permit such payments, Airlines/Shipping companies and their agents have also been permitted to accept payments in rupees from the funds held in NRO/NRE accounts for the purpose.

Yes. Authorised dealers may allow such overdrawing up to Rs. 1,000/- subject to the condition that the overdrawing together with the interest payable thereon are cleared within a period of two weeks.

While interest on loans up to Rs. 2 lakhs against NRO/NRE fixed deposit accounts will be charged two percent above the rates paid banks for the concerned deposits, repayment of loans will have to be made either by adjustment of the deposits or by fresh remittances from abroad. Banks are free to charge interest on loans above Rs. 2 lakhs.

Yes, NRI and other non-residents can maintain NRO rupee accounts as well as keep deposits with banks in India under NRNR Rupee Deposit Scheme.

Such an account can be opened with an authorised dealer in India by remitting funds from abroad in any convertible foreign currency. Under the NRNR Scheme, deposits designated in rupees can be kept for periods ranging from 6 months to 3 years. NRIs can also open such accounts by transferring funds from their existing NRE/FCNR accounts. No penal interest is chargeable for premature withdrawal of NRE/FCNR deposits for the purpose of making investments in the scheme if the deposit is to be kept with the same authorised dealer.

Banks are free to determine the interest rate under this Scheme.

The principal amount of the deposit is not eligible for repatriation . Interest earned upto 30th September 1994 is also not eligible for repatriation. Interest earned for the period beginning 1st October 1994 is,however,eligible for repatriation.or can be utilised for opening fresh NRE/FCNR deposits, or can be credited to existing NRE accounts.

Only the principal amount of deposit could be renewed under the scheme upto 30th September 1994. However, since interest accrued for the period from 1st October 1994 is repatriable, the principal amount together with interest accrued for the period from 1st October 1994 can be renewed under the scheme.

Yes Authorised dealers are permitted to grant loans/overdrafts for purposes other than investment.

Banks have been advised to redesignate such accounts as resident accounts on return of the account holder to India.

No. Banks have been advised to continue to pay interest at the contracted rate till the maturity of the deposit if the deposit is held for the full term even after conversion into resident rupee account.

Authorised dealers have been permitted to credit the proceeds of foreign currency notes/travellers cheques brought by the account holder from abroad during his visit to India provided they are tendered in person. Where the amount of foreign currency notes tendered exceeds U.S. $2,500 or its equivalent or the total amount tendered i.e. currency notes and travellers cheques, are in excess of U.S. $10,000 or its equivalent, it should have been declared to the Customs on the Currency Declaration Form (CDF) at the time of the account holder's arrival into India. Further, in the case of travellers cheques, they should be presented by the account holder himself and discharged by him in presence of the official of the concerned bank.

The loans raised against NRE deposits can be repaid out of NRO funds but in such cases, the interest would be charged at commercial rate as in force from time to time.

Yes.

Funds held in NRO account will be allowed to be credited to the non-resident nominee's NRO account only and no repatriation is permitted. Repatriation of funds from the deceased person's NRE account will be permitted by authorised dealers.

Yes, but only for local payments to be made on behalf of the account holder. In cases where the account holder or a bank designated by him has been granted permission by Reserve Bank to make investment in India, the Power of Attorney holder (POA) is permitted to operate the account or facilitate such investment. POA holders cannot, however, make gifts from NRE accounts.

Balances held in NRE accounts can be repatriated abroad freely, whereas funds in NRO account cannot be remitted abroad but used only for local payments in rupees. Consequently, funds remitted from abroad or local funds which can otherwise be remitted abroad to the account holder can only be credited to NRE accounts. Funds which do not qualify, under the Exchange Control regulations, for remittance outside India are required to be credited to NRO accounts.

Funds held in NRE accounts can be repatriated abroad freely. Funds held in NRO accounts which would generally be from a local source cannot be repatriated outside India Interest earned on funds in NRO accounts during the financial year 1994-95 and onwards can however, be remitted to the extent permitted by Reserve Bank.

Yes. Except for the purpose of re-lending, carrying on agricultural/plantation activities or for investment in real estate business. Loans against NRE fixed deposits can, however, be utilised for investments in India on non-repatriation basis, in certain specified areas and for acquisition of flats/houses subject to prescribed conditions.

Yes. Authorised dealers can permit transfer of funds from the NRE account of one person to the NRE account of another person for bona fide personal purposes. Transfers by way of gifts are permitted subject to payment of gift tax.

Remittances made for credit to rupee accounts (i.e. NRE/NRO/NRNR accounts) maintained by NRIs are converted at market rate.

In the case of NRE accounts, the interest rates for deposits up to one year should not exceed Bank Rate minus 2 percentage points. Interest rates on term deposits of over one year are determined by the banks themselves. Interest rates on NRO accounts are fixed as in the case of domestic deposits.

Yes. Debits for local payments are allowed freely, Funds representing legitimate dues of the account holder of proceeds of remittances received from abroad through banking channels are permitted to be credited freely.

NRO and NRE accounts can be maintained in current/savings/ fixed deposit form while NRNR accounts can be only in fixed term deposits.

Three types of rupee accounts Viz. Non-resident (External) Rupee Accounts (NRE account), Ordinary Non- resident Rupee Account (NRO accounts ) and Non-resident (Non-repatriable) Rupee Deposit accounts (NRNR) are permitted to be maintained.

No.

No.

NRO accounts can be held jointly with residents, However, NRE accounts cannot be held jointly with residents.

Yes. Accounts in foreign currencies (FCNR accounts) can be maintained by NRIs with authorised dealers in India.

FCNR Accounts permitted to be maintained in Pound Sterling, U.S. Dollar, Deutsche Mark and Japanese Yen.

No. FCNR accounts can be maintained only in the form of term deposits, i.e. a deposit kept for fixed period ranging from 6 months to 3 years.

The maximum period of maturity is three years.

Yes. However, this is subject to the levy of a penalty.

Interest in such cases is paid at one per cent below the interest rate payable for the period for which the deposit is, however, payable only if they are kept for a minimum period of six months.

No. While the premature withdrawal would be allowed, no interest would be payable. For such premature withdrawals the bank may levy penalty as per their discretion.

Yes. The Banks have been permitted to offer interest on such deposits at rates not more than the LIBOR prevailing on the last working day of the previous week for the relevant maturity and currency. Subject to this guideline, banks can offer either fixed or floating rate of interest on such deposits.

Debits for local payments in rupees are allowed freely. As regards debits for investments in India, please see Chapters III and IV.

Yes. Authorised dealers maintaining these accounts would allow repatriation abroad of these funds.

No.

Yes.

Yes. (Also see Answer to Q.26 for repatriation of funds in NRE account)

Banks would treat the deposits held in FCNR accounts as resident deposits but would continue to pay interest at the contracted rate till maturity of the deposit.