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| Who is an
NRI? |
| An NRI is a person resident outside India who;
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- is a citizen of any country other than Bangladesh or Pakistan if
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-he at any time held Indian passport, or |
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-he or either his parents or any of his grand parents were a citizen of
India by virtue of the constitution |
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of India or the Citizenship Act , 1955 (57 of 1955), or |
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-a person is a spouse of an Indian citizen or a person referred to in sub-clause
(a) or (b) above." |
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| What are
the different accounts an NRI can open and what are their features? |
| NRIs can open FCNR (B),
NRE, NRO, accounts. Facility of NRNR & NRSR has
so far been discontinued w.e.f. 1st April 2002 |
| 1.FCNR(B)
or Foreign Currency Non Resident(Bank) Account. |
- This kind of deposit is ideal for Non Resident Indians who wish to
protect their currency against foreign exchange fluctuations.
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- FCNR (B) accounts can be held in the form of fixed deposits of One
year to Three years tenure only.
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- Interest rates on these deposits are accepted on 360 days a year,
with compounded effect at an interval of 180 days and are payable in
the currency of the deposit. The Reserve Bank of India specifies them
for all periods.
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- Interest earned on these deposits is exempt from Income Tax regulations
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- The deposits can be opened in four currencies USD, GBP, EURO and JPY
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- Nomination facility is available for FCNR deposits
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- The entire deposit amount inclusive of interest can be repatriated
outside India whenever required
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- The deposit can be opened jointly with other Non Resident Indians
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- Funding Your Account: The FCNR Deposit can be opened by the following
funds transfer methods:
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-Remittance from abroad |
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-Proceeds of foreign currency and travellers cheques |
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-Foreign Draft/personal cheques drawn outside India |
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-n Transfer from existing NRE/FCNR (B) Accounts |
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| 2.NRE or
Non Resident External Account. |
- If you are looking for a Repatriable Rupee account to place your funds,
then NRE accounts are ideal for you.
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- NRE a/c cannot be maintained jointly with Resident Indians, it can
only be jointly maintained with 'Non-Resident Indians'.
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- Mandate to operate the NRE Savings Bank account can be given to a
local person allowing him to operate the account.
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- Depending on your requirements you could opt for Savings NRE account
if you want a checking account or NRE fixed deposit if you are looking
for high returns. The minimum period for fixed deposits is 6 months
and the maximum period is 7 years.
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- Interests on NRE term deposits are high and compounded quarterly.
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- Income earned on these accounts does not attract provisions of the
Indian Income Tax Act.
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- The entire balance in NRE accounts can be repatriated outside India
at any time without any reference to the RBI.
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-Proceeds of foreign currency/traveller's cheques |
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-Foreign exchange remittances from abroad vide wire transfer SWIFT |
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-Foreign Drafts, personal cheques etc.drawn outside India in the name of
the account holder |
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-Proceeds from the account holders' existing NRE/FCNR accounts |
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-Proceeds of interest on Government securities and dividend on units of
UTI and other investment in |
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shares and debentures provided that the units, Government securities, shares
and debentures were |
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purchased by debit to the account holders' NRE/FCNR(B) accounts |
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-Maturity proceeds and sale proceeds of Government securities including
National Plan/Savings |
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Certificates if the securities were purchased by debit to the account holders'
NRE/FCNR(B) accounts |
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-Nomination facility is available on NRE deposits. |
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| 3.NRO
or Non Resident Ordinary account |
- This kind of account is ideal for Non Resident Indians who have local
income and expenses in India. For example 'house rent', dividend etc.
can be credited to Non Resident Ordinary Savings account
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- Any Person Resident outside India can open this a/c.
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- The accounts can be opened jointly with other Non Resident Indians/Residents
in India
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- You have the choice of opening a Savings, Current or a Fixed Deposit
account under this scheme
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- Cheque book facility is available
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- Interest rates on NRO accounts are the same as the domestic rates
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- Interest earned on balances in NRO accounts is not exempt from Indian
Income Tax Act. The tax on income earned is deducted at source @ 30%.
(every rupee earned)
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- The funds in NRO accounts are non repatriable.
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- The deposit can be opened by the following funds transfer methods:
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-Remittance from abroad |
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-Proceeds of foreign currency and travellers cheques |
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-Draft/personal cheques |
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-Transfer from existing FCNR(B)/NRNR/NRE/NRO/NRSR accounts |
- Funds from local source representing bonafide transactions in rupees
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- Loan can be given against these deposits
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| What is the
Status of the NRNR and NRSR Deposit Schemes? |
| Since RBI has withdrawn erstwhile NRNR and
NRSR Scheme w.e.f.1st April 2002 and therefore with effect from that date
no deposits whether by way of renewal of existing deposits, or by way
of fresh inward remittances or otherwise shall be accepted by the Banks
under the Non-Resident Non Repatriable (NRNR) Rupee Account Scheme or
the Non-Resident (Special) Rupee (NRSR) Account Scheme. Existing deposits
under the NRNR Account Scheme may be continued only up to the date of
maturity. On maturity of the existing deposit under the NRNR Account Scheme
the proceeds shall be credited to the accountholder's NRE Account at the
accountholder's option and after giving notice to them.
The existing accounts in the form of a term deposit under the NRSR Account
Scheme may be continued till the date of maturity. On maturity the proceeds
shall be credited to the accountholder's NRO Account.
Existing NRSR Account, other than a term deposit, shall not be continued
after the 30th of September, 2002 and may at the option of the accountholder,
be closed or the balance therein credited to his NRO Account on or before
that date.
The NRNR accountholder has the option to directly credit the maturity
proceeds to NRE account but NOT to FCNR(B).
The Non-Resident Ordinary Rupee (NRO) Scheme remains unchanged.
Therefore, the balances held in such accounts continue to remain non-repatriable
The quantum of deposits representing only current income (like
pension, dividend, rent interest etc.) will be permitted to be repatriated
outside India." ” |
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