person or entity residing outside India is entitled to open
a NRO account with an authorised dealer or an authorised
bank for transactions conducted in Indian Rupees.
or entities of Bangladeshi or Pakistani nationality or
ownership require approval from the RBI.
Types of Accounts
accounts can be opened as current, savings, recurring or fixed
deposit accounts. The RBI determines the rate of interest on
these accounts and issues guidelines for opening, operating
and maintaining them.
Joint Accounts with
Joint accounts are permitted with resident and
from outside India through normal banking channels received
in freely convertible foreign currency.
freely convertible foreign currency can be deposited into
the account during the account holder's visit to India.
Foreign currency exceeding USD 5000/- or its equivalent in
the form of cash has to be supported by a Currency
Declaration Form. Rupee funds must be supported by an
Encashment Certificate, if they are funds brought from
income earned in India, such as rent, dividend, pension or
interest. Even proceeds from sale of assets including
immovable property acquired out of rupee or foreign currency
funds or through inheritance.
payments towards expenses and investments in India
outside India of current income like rent, dividend,
pension, interest etc. in India of the account holder.
up to USD One million, per calendar year, for all bonafide
purposes with the approval of the authorised dealer.
Remittance of Assets
NRIs and PIO may remit upto USD One million per calendar year,
out of balances held in the NRO account which could be
acquired from the sale proceeds of assets acquired in India
out of rupee or foreign currency funds or by way of
inheritance from a resident Indian, provided:
(a) Assets acquired in India
out of rupee/foreign currency funds
property: NRIs and PIO may remit sale proceeds of immovable
property purchased by them when they were resident or out of
Rupee funds as NRI or PIO.
(ii) Other financial assets:
There is no lock-in period for remittance of sale proceeds of
other financial assets
(b) Assets acquired by way of
inheritance: Sale proceeds of assets acquired through
inheritance can be remitted. No lock-in period applies here if
the authorised dealer is satisfied that the proceeds are from
Remittance of assets out of
NRO account by a person resident outside India other than
A foreign national who is not a citizen of Pakistan,
Bangladesh, Nepal or Bhutan and who
retired as an employee in India,
inherited assets from a resident Indian, or
a widow residing outside India and has inherited assets of
her deceased husband who was a resident Indian can remit
upto USD one million per calendar year on production of
documentary evidence to support the acquisition by way of
inheritance or legacy of assets to the authorised dealer.
The above facility of repatriation from sale of immovable
property is not extended to citizens of Pakistan, Bangladesh,
Sri Lanka, China, Afghanistan, Iran, Nepal and Bhutan.
Remittance of sale proceeds from other financial assets is not
extended to citizens of Pakistan, Bangladesh, Nepal and
Foreign Nationals of
non-Indian origin on a visit to India
Foreign nationals of non-Indian origin are permitted to open a
NRO account (current/savings) on their visit to India with
funds remitted from outside India through normal banking
channels or by foreign exchange brought to India. The balance
in the NRO account is converted by the bank into foreign
currency for payment to the account holder when he leaves
India, provided the account was maintained for less than six
months. The account should not be credited with any local
funds during the term, except for interest accrued on it.
Grant of Loans/ Overdrafts
by Authorised Dealers/ Bank to Account Holders and Third
Loans to NRI account holders and to third parties is granted
in Indian Rupees by authorised dealers (banks) against the
security of fixed deposits provided:
loans are utilised only for meeting the borrower's personal
requirements or for business and not for
agricultural/plantation /real estate or relending activities
regulations pertaining to margin and rate of interest will
norms and considerations which apply to loans to trade and
industry will apply to loans and facilities granted to third
authorised dealer/bank may allow an overdraft to the account
holder subject to his commercial discretion and compliance
with the interest rate directives.
of Resident Status of Account holder -(a) From Resident to
When a resident Indian leaves India for taking up employment
or for carrying on business outside India, his existing
account is designated as a Non-Resident (Ordinary) Account,
except in the case of persons shifting to Bhutan and Nepal.
For the latter, the resident accounts do not change to NRO
(b) From Non-Resident to
NRO accounts may be re-designated as resident rupee accounts
once the account holder returns to India for taking up
employment, or for carrying on business or for any other
purpose indicating his objective to stay in India for an
uncertain period. Where the account holder is only on a
temporary visit to India, the account continues to be treated
as non-resident during the visit.
Treatment of Loans/
Overdrafts in the Event of Change in the Resident Status of
In case of a resident Indian who had availed of loan or
overdraft facilities while resident in India and who
subsequently becomes a NRI, the authorised dealer may at its
discretion allow the loan facility to continue. In this case,
payment of interest and repayment of loan may be made by
inward remittance or out of bonafide resources in
Payment of funds to
The amount payable to a non-resident nominee from the NRO
account of a deceased account holder is credited to the NRO
account of the nominee.
Facilities to a person going
abroad for studies -
going abroad for studies are treated as Non-Resident Indians
(NRIs) and are eligible for all the facilities enjoyed by
NRIs. All loans availed of by them as residents in India will
continue to be extended as per FEMA regulations.
dealers are allowed to issue International Credit Cards to
NRIs and PIO, without the permission of the RBI. Such
transactions can be made by inward remittance or out of
balances held in the cardholder's FCNR/NRE/NRO Accounts.
The remittances, after payment of tax are allowed to be made
by the authorised dealers on production of a statement by the
remitter and a Certificate from a Chartered Accountant in the
formats prescribed by the Central Board of Direct Taxes,
Ministry of Finance, Government of India