Non Resident Indian (NRI)
A ‘Non-Resident Indian’ (NRI) is a person resident outside India, who is a citizen of India.
PIO
PIO – A Person of Indian origin is a citizen of any country other than Pakistan, Bangladesh, or such other country as may be specified by the Central Government, satisfying the following conditions.
PIO – Must satisfy the following conditions:
- Who was a citizen of India by virtue of the Constitution of India or the Citizenship Act 1955 : or
- Who belonged to a territory that became part of India after 15th day of August 1947: or
- Who is a child or a grandchild or a great grandchild of a citizen of India or of a person referred to in clause (a) or (b): or
- Who is a spouse (of foreign origin) of a citizen of India or spouse (of foreign origin) of person referred to in clause (a) or (b) or (c).
(PIO will include an ‘Overseas Citizen of India’ cardholder within the meaning of Section 7(A) of the Citizenship Act, 1955.)
Features of NRO Accounts available to Non-Resident Indians (NRIs):
| Particulars | Non-Resident Ordinary Rupee Account Scheme [NRO Account] |
| (1) | (4) |
| Who can open an Account | Any person resident outside India for putting through bonafide transactions in rupees. Individuals/ entities of Pakistan nationality/ origin and entities of Bangladesh origin require the prior approval of the Reserve Bank of India. A Citizen of Bangladesh/Pakistan belonging to minority communities in those countries i.e. Hindus, Sikhs, Buddhists, Jains, Parsis and Christians residing in India and who has been granted LTV or whose application for LTV is under consideration, can open only one NRO account with an AD bank subject to the conditions mentioned in Notification No. FEMA 5(R)/2016-RB Dated April 01, 2016, as updated from time to time. |
| Joint account | May be held jointly with NRIs/ PIOs. Also with resident but on ‘Former or Survivor’ basis. |
| Nomination | Permitted |
| Currency in which account is denominated | Indian Rupees |
| Repatriablity | Not repatriable except for the following: i) all current income (Net of Taxes, as applicable)and ii) up to USD 1 (one) million per financial year (April-March) by NRI/ PIO, along with their other eligible assets, subject to applicable taxes and RBI guidelines. |
| Type of Account | Savings, Current, Recurring, Fixed Deposit |
| Period for fixed deposits | As applicable to resident accounts. |
| Rate of Interest | As per RBI guidelines issued by its Department of Banking Regulations. |
| Operations by Power of Attorney in favour of a resident by the non-resident account holder | Operations in the account in terms of Power of Attorney is restricted to withdrawals for permissible local payments in rupees, remittance of current income (net of applicable taxes) to the account holder outside India or remittance to the account holder himself through normal banking channels. While making remittances, the limits and conditions of repatriability will apply. |
| Loans | All loan proposals/enquiries from NRIs must be refered to Head Office |
| a. In India | |
| i) to the Account holder | Permitted subject to the regulatory requirements |
| ii) to Third Parties | Permitted, subject to regulatory requirements |
| b. Abroad | |
| i) to the Account holder | Not Permitted |
| ii) to Third Parties | Not Permitted |
| c. Foreign Currency Loans in India | |
| i) to the Account holder | Not Permitted |
| ii) to Third Parties | Not Permitted |
| Purpose of Loan | |
| a. In India | |
| i) to the Account holder | Personal requirement and / or business purpose.* |
| ii) to Third Parties | Personal requirement and / or business purpose.* |
| ii) to Third Parties | |
| b. Abroad To the account holder and Third Parties | Not permitted. |
* The loans cannot be utilised for the purpose of on-lending or for carrying on agriculture or farm houses or plantation activities or for investment in real estate business or for any other activity where foreign investment is not allowed.
Permissible Credits / Debits
A. Credits
- Proceeds of remittances from outside India through normal banking channels received in any permitted currency.
- Any foreign currency, which is freely convertible, tendered by the account holder during his temporary visit to India. Foreign currency exceeding USD 5000 or its equivalent in the form of cash should be supported by currency declaration form. Rupee funds should be supported by encashment certificate, if they represent funds brought from outside India.
- Transfers from rupee accounts of non-resident banks.
- Legitimate dues in India of the account holder. This includes 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.Resident individual may make a rupee gift to a NRI/PIO who is a close relative of the resident individual [close relative as defined in Section 2(77) of the Companies Act, 2013] by way of crossed cheque /electronic transfer. The amount shall be credited to the Non-Resident (Ordinary) Rupee Account (NRO) a/c of the NRI / PIO and credit of such gift amount may be treated as an eligible credit to NRO a/c. The gift amount would be within the overall limit prescribed under the Liberalised Remittance Scheme (LRS) for a resident individual.
- Resident individual may lend to a Non-resident Indian (NRI)/ Person of Indian Origin (PIO) close relative [means relative as defined in Section 2(77) of the Companies Act, 2013] by way of crossed cheque /electronic transfer, subject to:
a. Conditions within the overall limit prescribed under the Liberalised Remittance Scheme available for a resident individual and
b. RBI GUIDELINES. The loan amount should be credited to the NRO a/c of the NRI /PIO. Credit of such loan amount may be treated as an eligible credit to NRO a/c;
B. Debits
- All local payments in rupees including payments for investments in India subject to compliance with the relevant regulations made by the Reserve Bank.
- Remittance outside India of current income like rent, dividend, pension, interest, etc. earned in India of the account holder, net of taxes.
- Remittance up to USD one million, per financial year (April- March), by NRI/ PIO, subject to payment of tax and RBI Directives, as applicable.
- Transfer to NRE account of NRI/ PIO within the overall ceiling of USD one million per financial year subject to payment of tax and RBI Directives, as applicable.