NRI's - RBI Guidelines

Reserve Bank of India (RBI) Guidelines specific to Investment in Immovable Property for Non Resident Indians (NRIs) and Persons of Indian Origin (PIOs)

NOTE: The below stated information has been taken from the FAQs section of the RBI, which was last updated on the September 19, 2014. We aim to keep updating this section with relevant information from time to time, however to ensure you have the latest information, you may also visit - rbi.org.

In terms of the Foreign Exchange Management Act (FEMA), 1999 a person resident outside India means a person who is not resident in India.

What are the different types of accounts which can be maintained by an NRI 1/ PIO2 in India?

If a person is an NRI or PIO, she/he can, without the permission from the RBI, open, hold and maintain the different types of accounts given below with an Authorised Dealer in India, i.e. a bank authorised to deal in foreign exchange.NRO Savings Accounts can also be maintained with the Post Offices in India. However, individuals/ entities of Bangladesh and Pakistan require prior approval of the Reserve Bank.

Types of accounts which can be maintained by an NRI/PIO in India are as under:

A. Non-Resident Ordinary Rupee Account (NRO Account)

Any person resident outside India may open an NRO Account with an authorised dealer or an authorised bank for the purpose of putting through bona fide transaction in rupees.

Opening of accounts by individual/entities of Pakistan and entities of Bangladesh require prior approval of the RBI.

NRO Accounts may be opened and/or maintained in the form of current, savings, recurring or fixed deposit accounts.

• Savings Account - Normally maintained for crediting legitimate dues/earnings/income such as dividends, interest, etc. Banks are free to determine the interest rates.
• Term Deposits - Banks are free to determine the interest rates. Interest rates offered by banks on NRO deposits cannot be higher than those offered by them on comparable domestic rupee deposits.
• Account should be denominated in Indian Rupees.
• Permissible credits to NRO Accounts are transfers from rupee accounts of non-resident banks, remittances received in permitted currency from outside India through normal banking channels, permitted currency tendered by account holder during his temporary visit to India, legitimate dues in India of the account holder like current income like rent, dividend, pension, interest, etc., sale proceeds of assets including immovable property acquired out of rupee/foreign currency funds or by way of legacy/inheritance.
• Eligible debits such as all local payments in rupees including payments for investments as specified by the RBI and remittance outside India of current income like rent, dividend, pension, interest, etc., net of applicable taxes, of the account holder.
• NRI/PIO may remit from the balances held in NRO Account an amount not exceeding USD 1 Million per financial year, subject to payment of applicable taxes.
• The limit of USD 1 Million per financial year includes sale proceeds of immovable properties held by NRIs/PIOs.
• Other than current income and the limit of USD 1 Million per financial year applicable to NRIs/PIOs, balances in NRO Accounts cannot be repatriated without the prior approval of the RBI.
• The accounts may be held jointly with residents and/or with Non-Resident Indians.
• The NRO Account holder may opt for nomination facility.
• NRO (Current/Savings) account can also be opened by a foreign national of non-Indian origin visiting India, with funds remitted from outside India through a banking channel or by sale of foreign exchange brought by him to India. The details of this facility are given in the FAQs on "Accounts opened by Foreign Nationals and Foreign Tourists" available on the RBI website.
• Loans to non-resident account holders and to third parties may be granted in Rupees by Authorized Dealers/Banks against the security of fixed deposits subject to certain terms and conditions.