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NRO/ NRE/ FCNR - We've got your back

A NRI may hold bank accounts in India only with an AD bank. The AD Bank in India may accept deposits from NRIs under the following schemes:

  • Non-Resident (External) Account (NRO) Scheme in Indian Rupees;

  • Non-Resident (Ordinary) Account (NRE) Scheme in Indian Rupees;

  • Foreign Currency Non-Resident (FCNR) in Foreign Currency;

  • Special Non-Resident Rupee Account (SNRR).

Banking Accounts1.PNG

1 In this FEMA regulation, PIOs do not include nationals of Pakistan and Bangladesh

2 Individuals/ entities of Pakistan and entities of Bangladesh require prior approval of relevant authorities.

Permissible transactions in NRE a/c and FCNR a/c:

Banking Accounts2.png

Permissible transactions in SNRR a/c:

  • SNRR a/c can be opened only if a person resident outside India has business interest in India.

  • The debits and credits in SNRR a/c should be specific/ incidental to the business proposed to be done by the account holder.

  • Transfers from NRO a/c to SNRR a/c are prohibited.

  • The tenure of SNRR a/c should be concurrent to the tenure of the contract/ period of operations/ business of the account holder and in no case the period should exceed 7 years from the date of opening of the account.

Permissible transactions in NRO a/c:

Banking Accounts3.png

Points to Remember:

  • An Individual cannot continue to hold a Resident a/c when he becomes a Person Resident outside India for permanent settlement. He must immediately inform the banker and redesignate the said a/c into a NRO a/c. The onus is on the individual to inform the bankers.

  • AD Banks can issue International Credit Cards to NRIs/ PIOs without prior approval of RBI. Such transactions may be settled by inward remittance or out of balances held in the cardholder’s NRO/ NRE/ FCNR a/c.

  • Disadvantage of NRE a/c for customers in that if Rupee depreciates, savings of the person converted in US $ reduces. FCNR a/c can be maintained in foreign currency.

  • Redesignation of bank accounts is one of the first steps that a person leaving India or returning to India should take. If your Residential Status under FEMA changes, please inform your AD Bank at the earliest. If you are unsure of what to do, feel free to post a query.