How to Open a NRI Account in India from Outside?

  • For all those who are residing outside the borders of the India, opening an NRI account from outside of India is nowadays very easy and convenient. One can open and use an account of any bank in India. The efficiency of the internet banking over the last decade has made this venture possible. With the use of e banking, all transactions can be carried out easily.

    First and foremost the meaning of the term NRI should be clear. The term NRI refers to Non Resident Indian. It is also used synchronously with PIO (Persons of Indian Origin). NRI is a person who does not reside in India but outside of India. This is in accordance with the FEMA act of 1999. Individual not residing in Pakistan or Bangladesh can open an account without the permission of the Reserve Bank of India. However the resident of Bangladesh or Pakistan will need prior approval of the RBI.

    While Opening an NRI bank account from outside of India, one can have multiple choices. The bank should compulsorily have an authorized dealer to handle foreign currencies. The account balance will need to be denominated in rupees.

    The NRI or a PIO can open three kinds of accounts. The first is known as the NRO account which stands for Non-Resident ordinary Rupee Account.

    NRO account can be in the form of a NRO Current Account, NRO Savings Account, NRO term deposit or even a recurring account. The second one is called the NRE account. This stands for Non Resident (External) Rupee account. They are opened by the NRI and not through the holder of the power of attorney. They can be in the form of savings, current, fixed deposits or recurring.

    The third and final type of account is (FCNR) Foreign Currency Non Resident Bank Account. They are in the form of term deposits. They can be utilized for a period of 5 years maximum.

    Other rules are applicable and functional as it is with any other account held by a resident of India. The NRO account can be held jointly with anyone, nomination facility is available, maximum limit of remittance on the amount transferred from the account is 1 million USD and loan sanctions to third parties is also provided based on certain norms. In case of a NRE account, balances are freely repatriable. The accrued interest in them is devoid from wealth and income taxes. The power of attorney holder can operate this type of account only for a limited time. Loans up to 100 lakhs can be provided against the funds lying in the NRE account.

    For the FCNR account, it can be used in any freely convertible currency. All types of debits and credit facilities that are allowed in the case of NRE accounts can also be availed in the case of FCNR account. The interest rates are governed by the Banking Operations and Development department of the Reserve Bank of India. If the person becomes a resident of India during the duration of term deposit, the deposits can continue under the permission of the holder till maturity. Other facilities associated with NRI account are investment activities (domestic mutual funds, treasury bills, PSU bonds etc.), investment in immovable property and other facilities to those who look forward to returning to India. Some of the well-known banks in India for opening of NRI accounts are South Indian Bank, HDFC, ICICI, and many more. The rules and guidelines for opening an account can be located in the website of the bank.