NRI Banking in India
NRI Banking in India
Non-Resident Indians (NRI) whether they are individuals, corporations, or associations of persons, can maintain bank accounts with authorized banks in India. Also, foreign nationals can open bank accounts in India to meet local expenses. In this article on NRI Banking in India, we look at the types of account NRI’s and Foreign Nationals can maintain in India.
Non-Resident Ordinary Rupee Account (NRO Account)
NRO accounts are denominated in Indian rupees and can also be held jointly with resident Indians. On creating NRI accounts, individuals can maintain it in the form of savings accounts, current accounts, recurring deposits and, term deposits. The account can be used for depositing remittances from abroad through normal banking channels, and currency carried on temporary visits to India, rent received, interest received, etc. On creating NRI accounts, individuals can maintain it in the form of savings accounts, current accounts, recurring deposits and, term deposits.
Non-Resident (External) Rupee Account (NRE Account)
NRE accounts can only be opened by the NRI itself. It is denominated in Indian rupees and can be held jointly with resident Indians, subject to certain conditions. NRE accounts can be opened and maintained in the form of savings accounts, current accounts, recurring deposits, and term deposits. Balance held in an NRE account can be repatriated freely. The interest income earned on the account and the balance held in NRE accounts is free from income tax and wealth tax.
Overdrawing of an NRE account is permissible to the extent of INR 50,000, provided the repayment is made by remittances received through normal banking channels or an NRE/FCNR account within 2 weeks.
Foreign Currency Non-Resident (Bank) Account (FCNR (B) Account)
FCNR (B) accounts can only be opened in the form of term deposits that range from 1 to 5 years. Rules that extend to account opening, credits, and debits applicable to NRE accounts are also applicable here. Only thing, you can avail of a loan up to INR 1 crore and not INR 50,000 as applicable to NRE accounts. These accounts can be opened in any freely convertible foreign currency. Accounts can be held at the same terms and conditions till maturity, even if the account holder becomes a resident of India.