A ‘Non-resident Indian’ (NRI) is a person resident outside India who is a citizen of India.

MAJOR ACCOUNTS THAT CAN BE OPENED IN INDIA BY A NON-RESIDENT

Foreign Currency (Non- Non-Resident

Non-Resident (External)
Resident) Account Ordinary Rupee
Particulars Rupee Account Scheme
(Banks) Scheme [FCNR Account Scheme
[NRE Account]
(B) Account] [NRO Account]
(1) (2) (3) (4)
Who can open NRIs Any person resident
an account outside India for putting
through bonafide
transactions in rupees.

Joint account May be held jointly in the names of two or more NRIs/ May be held jointly in
the names of two or
The resident relative can operate the account as a more NRIs.
Power of Attorney holder during the life time of the NRI/
PIO account holder. May be held jointly with
residents on ‘former or
survivor’ basis.
Currency Indian Rupees Any permitted currency Indian Rupees
i.e. a foreign currency
which is freely convertible
Type of Savings, Current, Term Deposit only Savings, Current,
Account Recurring, Fixed Deposit Recurring, Fixed
Deposit
Period for From one to three years, For terms not less than 1 As applicable to
fixed deposits year and not more than 5 resident accounts.
years
Permissible Credits permitted to this account are inward remittance Inward remittances
Credits from outside India, interest accruing on the account, from outside India,
interest on investment, transfer from other NRE/ legitimate dues in India
FCNR(B) accounts, maturity proceeds of investments and transfers from
(if such investments were made from this account or other NRO accounts
through inward remittance). are permissible credits
to NRO account.
Care: Only those credits which have not lost repatriable
character Current income like
rent, dividend, pension,
interest etc. will be
construed as a
permissible credit

Rupee gift/ loan made

by a resident to a NRI/
PIO relative within the
limits prescribed under
the Liberalised
Remittance Scheme
 may be credited to the
latter’s NRO account.
Permissible Permissible debits are local disbursements, remittance The account can be
Debits outside India, transfer to other NRE/ FCNR(B) accounts debited for the purpose
and investments in India. of local payments,
transfers to other NRO
accounts or remittance
of current income
abroad.

Apart from these,

balances in the NRO
account cannot be
repatriated abroad
except by NRIs and
PIOs up to USD 1
million, subject to
conditions specified in
Foreign Exchange
Management
(Remittance of Assets)
Regulations, 2016.

Funds can be
transferred to NRE
account within this USD
1 Million facility.
Repatriablity Repatriable Not repatriable except
for all current income.

Balances in an NRO
account of NRIs/ PIOs
are remittable up to
USD 1 (one) million per
financial year (April-
March) along with their
other eligible assets.
Taxabilty Income earned in the accounts is exempt from income Taxable
tax and balances exempt from wealth tax
Rate of As per guidelines issued by the Department of Banking Regulations
Interest
Change in NRE accounts should be On change in residential NRO accounts may be
residential designated as resident status, FCNR (B) deposits designated as resident
status from accounts or the funds held may be allowed to accounts on the return
Non-resident in these accounts may be continue till maturity at the of the account holder to
to resident transferred to the RFC contracted rate of interest, India for any purpose
accounts, at the option of if so desired by the indicating his intention
the account holder, account holder. to stay in India for an
immediately upon the uncertain period.
return of the account holder
 to India for taking up Authorised dealers should Likewise, when a
employment or on change convert the FCNR(B) resident Indian
in the residential status. deposits on maturity into becomes a person
resident rupee deposit resident outside India,
accounts or RFC account his existing resident
(if the depositor is eligible account should be
to open RFC account), at designated as NRO
the option of the account account.
holder.

MAJOR FOREIGN CURRENCY ACCOUNTS THAT CAN BE OPENED IN INDIA BY A RESIDENT

INDIVIDUAL?

Answer: Some of the foreign currency accounts that can be opened by resident individuals with an
Authorised Dealer bank in India, along with their features are given below:

Resident Foreign Resident Foreign

Exchange Earners Foreign
Particulars Currency (Domestic) Currency (RFC)
Currency (EEFC) Account
[RFC(D)] Account Account
Who can
open the Exchange Earners Individuals Individuals
account
Joint Jointly with eligible persons; Jointly with any person Same as EEFC
account eligible to open the
or

With resident relative(s) on

former or survivor’ basis.

Relative as defined under

Companies Act, 2013 (viz.
members of HUF, spouse,
parents, step-parents, son,
step-son, daughter-in-law,
daughter, son-in-law,
brother/sister, step-brother/
step-sister)

Relative joint account holder

cannot operate the account
during the life time of the
account holder
Type of Current only Current only Current/ savings/ term
Account deposits
Interest Non-interest earning Non-interest earning De-regulated (As
decided by the AD bank)
Permitted 1) 100% of foreign exchange 1) Foreign exchange 1) Foreign exchange
Credits received on account of export received as payment/ received by him as
transactions. service/ gift/ honorarium superannuation/ other
while on visit abroad or monetary benefits from
2) advance remittance from a non-resident who is overseas employer
received by an exporter on a visit to India
towards export of goods or 2) Foreign exchange
services 2) Unspent amount of realised on conversion
foreign exchange of the assets referred to
3) Repayment of loans given acquired from AD for in Sec 6(4) of FEMA
to foreign importers travel abroad
3) Gift/ inheritance
4) Disinvestment proceeds on 3) Gift from close relative received from a person
conversion of ADR/ GDR referred to in Sec 6(4) of
4) Earning through export FEMA
5) professional earnings like of goods/ services, royalty
director’s/ consultancy/ 4) Foreign exchange
lecture fees, honorarium and 5) Disinvestment proceed acquired before the July
similar other earnings on conversion of shares 8, 1947 or any income
received by a professional by into ADR/ GDR arising on it held outside
rendering services in his India with RBI
individual capacity 6) foreign exchange permission
received as earnings of
6) Interest earned on the LIC claims/ maturity/ 6) Foreign exchange
funds held in the account surrendered value settled received as earnings of
in forex from an Indian LIC claims/ maturity/
7) Re-credit of unutilised insurance company surrendered value
foreign currency earlier settled in forex from an
withdrawn from the account Indian insurance
company
8) Payments received in
foreign exchange by an Indian 7) Balances in NRE/
startup arising out of sales/ FCNR (B) accounts on
export made by the startup or change in residential
its overseas subsidiaries status
Permitted 1) Any permissible current or Can be used for any No restrictions on
Debits capital account transaction permissible current/ utilisation in/ outside
capital account India.
2) Cost of goods purchased transactions.

3) Customs duty

4) Trade related loans and

advances