As per RBI guidelines, the residential status of an Indian changes to that of the Non-Resident, in the event of his stay abroad being more than 183 days. This period of 183 days is not applicable in certain cases like going overseas for employment or business. It is mandatory to inform the bank of your change of your residential status.
NRI banking facilities are available to NRIs and PIOs.
"Non Resident Indian" (NRI) means an Indian citizen or a foreign citizen of Indian origin (excluding citizens of Bangladesh and Pakistan) residing outside India. Students studying abroad are also treated as NRIs.
| Particulars | Foreign Currency (Non-Resident) Account (Banks) Scheme(FCNR(B) Account) | Non-Resident (External) Rupee Account Scheme(NRE Account) | (Non-Resident Ordinary Rupee Account Scheme(NRO Account) |
|---|---|---|---|
| Who can open an account | NRIs/PIOs | NRIs/PIOs | Any person resident outside India (other than a person resident in Nepal and Bhutan) |
| Joint account | In the names of two or NRIs |
In the names of two or more NRIs | May be held jointly with residents |
| Nomination | Permitted | Permitted | Permitted |
| Currency in which account is denominated |
Pound Sterling, US Dollar, Jap. Yen or Euro. Australian Dollar, Canadian Dollar | Indian Rupees | Indian Rupees |
| Repatriability | Repatriable | Repatriable | Non-repatriable* |
| Type of Account | Term Deposit only | Savings, Current, Recurring, Fixed Deposit | Savings, Current, Recurring, Fixed Deposit |
| Rate of Interest | Subject to cap: LIBOR minus 25 basis points except in case of Japanese Yen where the cap would be based on at the prevailing LIBOR rates | Rate of interest on domestic savings account will also be applicable to NRE savings account. For Fixed Deposits, the rates can be fixed by banks subject to ceilings prescribed by RBI | Rate of interest on domestic savings account will also be applicable to NRO savings account. For Fixed Deposits, the rates can be fixed by banks subject to ceilings prescribed by RBI |
| Tax Aspects | Interest income tax free and no tax deduction at source. | Interest income tax free and no tax deduction at source. | Interest income taxable and liable for TDS @30% plus applicable surcharge and cess subject to conditions. DTAA benefit may be available subject to fulfillment of conditions. |
* Except for the following in the account:- 1.Current income. 2. Upto US$ 1 million per calendar year for any bonafide purpose out of the balances in NRO account/sales proceeds of assets. Immovable property should have been held for a period not less than ten years. 3. If the immovable property acquired out of rupee funds is sold after being held for less than ten years, remittance can be made, if the sale proceeds were held for the balance period in NRO account (Savings/ Term Deposit) or in any other eligible investment, provided such investment is traced to the sale proceeds of the immovable property.
Extant RBI guidelines require NRE and FCNR deposits to run for a specified minimum tenor (currently 1 year) to earn any interest.
Extant RBI guidelines
require NRE and FCNR deposits to run for
minimum period of
1 year to earn any interest.