FAQ on Non-Resident Indians (NRI) Banking

Particulars	Foreign Currency (Non-Resident) Account (Banks) Scheme (FCNR(B) Account)	Non-Resident (External)Rupee Account Scheme (NRE Account)	Non-Resident Ordinary Rupee Account Scheme (NRO Account)
Who can open an account	NRIs (individuals / entities of Bangladesh/ Pakistan nationality/ownership require prior approval of RBI)	NRIs (individuals / entities of Bangladesh / Pakistan nationality/ownership require prior approval of RBI)	Any person resident outside India (other than a person resident in Nepal and Bhutan). (individuals / entities of Bangladesh / Pakistan nationality / ownership as well as erstwhile OCBs require prior approval of RBI)
Joint account	In the names of two or more non-resident individuals	In the names of two or more non-resident individuals	May be held jointly with residents
Nomination	Permitted	Permitted	Permitted
Currency in which account is denominated	Pound Sterling, US Dollar, Japanese Yen, Euro, Canadian Dollar and Australian Dollar	Indian Rupees	Indian Rupees
Repatriable	Repatriable	Repatriable	Not repatriable except for the following in the account - 1) current income 2) up to USD 1 million per financial year (April- March), for any bonafide purpose out of the balances in the account / sale proceeds of assets in India acquired by way of inheritance / legacy inclusive of assets acquired out of settlement subject to certain conditions.
Type of Account	Term Deposit only	Savings, Current, Recurring, Fixed Deposit	Savings, Current, Recurring, Fixed Deposit
Period for fixed deposits	For terms not less than 1 year and not more than 5 years.	At the discretion of the bank	As applicable to resident accounts.
Rate of Interest	Banks are free to determine interest rates for term deposits.	Subject to cap : LIBOR / SWAP rates minus 75 basis points for the respective currency / corresponding maturities.	Subject to cap : Fixed Deposits LIBOR / SWAP rates, as on the last working day of the previous month, for US Dollar of corresponding maturities with effect from close of business on April 24, 2007. Savings Bank Account Interest rate shall be at the rate applicable to domestic savings account with effect from close of business in India on 17-11-2005
Operations by Power of Attorney in favor of a resident by the non-resident account holder	Operations on the account in terms of Power of Attorney is restricted to withdrawals for permissible local payments or remittance to the account holder himself through normal banking channels.	Operations on the account in terms of Power of Attorney is restricted to withdrawals for permissible local payments or remittance to the account holder himself through normal banking channels.	Operations on the account in terms of Power of Attorney is restricted to withdrawals for permissible local payments or remittance to the account holder himself through normal banking channels.

Loans a.In India to the Account holder to Third Parties	Permitted up to Rs.20 lakh Permitted up to Rs.20 lakh	Permitted up to Rs.20 lakh Permitted up to Rs.20 lakh	Permitted Permitted
b. Abroad to the Account to Third Parties	Permitted $ Permitted $	Permitted $ Permitted $	Not Permitted Not Permitted
c. Foreign Currency Loans in India to the Account holder to Third Parties	Permitted up to Rs.20 lakh Not Permitted	Not Permitted Not Permitted	Not Permitted Not Permitted
Purpose of Loan a. In India to the Account holder	Personal purposes or for carrying on business activities. * Direct investment in India on non-repatriation basis by way of contribution to the capital of Indian firms / companies Acquisition of flat / house in India for his own residential use. (Please refer to Para 9 of Sch. 2 to FEMA 5	Personal purposes or for carrying on business activities. * Direct investment in India on non-repatriation basis by way of contribution to the capital of Indian firms / companies Acquisition of flat / house in India for his own residential use. (Please refer to para 6(a) of Sch.1 to FEMA 5)	Personal requirement and / or business purpose *
ii. to Third Party	Fund based and / or non-fund based facilities for personal purposes or for carrying on business activities *. (Please refer to para 9 of Sch. 2 to FEMA 5).	Fund based and / or non-fund based facilities for personal purposes or for carrying on business activities *. (Please refer to para 6(b) of Sch. 1 to FEMA 5)	Personal requirement and / or business purpose *
b. Abroad To the account holder and Third Party	Fund based and / or non-fund based facilities for bonafide purposes	Fund based and / or non-fund based facilities for bonafide purposes.	Not permitted

* The loans cannot be utilized for the purpose of re-lending or for carrying on agriculture or plantation activities or for investment in real estate business.

$ Provided no funds are remitted to India and are used abroad only.

Note:

When a person resident in India leaves India for Nepal and Bhutan for taking up employment or for carrying on business or vocation or for any other purpose indicating his intention to stay in Nepal and Bhutan for an uncertain period, his existing account will continue as a resident account. Such account should not be designated as Non-resident (Ordinary) Rupee Account (NRO).
ADs may open and maintain NRE / FCNR (B) Accounts of persons resident in Nepal and Bhutan who are citizens of India or of Indian origin, provided the funds for opening these accounts are remitted in free foreign exchange, Interest earned in NRE / FCNR (B) accounts can be remitted only in Indian rupees to NRIs and PIO resident in Nepal and Bhutan.
In terms of Regulation 4(4) of the Notification No.FEMA.5/2000-RB dated May 3, 2000, ADs may open and maintain Rupee accounts for a person resident in Nepal / Bhutan.
The regulations relating to the various deposit schemes available to Non-Resident Indians have been notified vide Notification No.FEMA.5 dated 3rd May 2000, as amended from time to time. The relevant Notifications and A P (DIR Series) Circulars have been placed on our website www.rbi.org.inand may please be referred to for full details.
AD Category – I banks and authorized banks may credit proceeds of demand drafts / bankers' cheques issued against encashment of foreign currency to the NRE account of the NRI account holder where the instruments issued to the NRE account holder are supported by encashment certificate issued by AD Category – I / Category – II.
AD Category – I banks and authorized banks may permit remittance of the maturity proceeds of FCNR (B) deposits to third parties outside India, provided the transaction is specifically authorized by the account holder and the authorized dealer is satisfied about the bonafides of the transaction.

For More Details Visit www.rbi.org.in

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