TMI BlogMaster Circular on Non-Resident Ordinary Rupee (NRO) AccountX X X X Extracts X X X X X X X X Extracts X X X X ..... CONTENTS 1. Definitions 2. Eligibility 3. Types of Accounts 4. Joint Accounts with Residents / Non- Residents 5. Permissible Credits / Debits 6. Remittance of assets 7. Foreign Nationals of non-Indian origin on a visit to India 8. Grant of Loans/overdrafts by authorised dealer / bank to account holders and third parties 9. Change of Resident Status of Account holder (a) From Resident to Non-resident 10. Treatment of loans/overdrafts in the event of change in the resident status of the borrower 11. Payment of funds to Non-resident/ Resident Nominee 12. Operation of NRO account by Power of Attorney holder 13. Facilities to a person going abroad for studies 14. International Credit Cards 15. Income-Tax Annex-1 Annex-2 APPENDIX NOTE 1. Definitions Non-Resident Indian (NRI): NRI for this purpose is defined in Regulation 2 of FEMA Notification No.5 dated May 3, 2000. In terms of this Notification, an NRI is a person resident outside India who is a citizen of India or is a person of Indian origin. Person of Indian Origin (PIO): PIO for this purpose is defined in Regulation 2 of FEMA ibid as a citizen of any country othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... current income like rent, dividend, pension, interest, etc. in India of the account holder. (iii) Remittance up to USD One million, per financial year (April-March), for all bonafide purposes, to the satisfaction of the authorised dealer bank. 6. Remittance of assets 6.1 Remittance of assets by a foreign national of non-Indian origin A citizen of a foreign state, not being a citizen of Nepal or Bhutan or a Person of Indian Origin (PIO), who has retired from an employment in India, or has inherited the assets from a person referred to in sub-section (5) of section 6 of the FEMA; or is a widow resident outside India and has inherited assets of her deceased husband who was an Indian citizen resident in India, may remit an amount, not exceeding USD 1,000,000 (US Dollar One million only) per financial year on production of, documentary evidence in support of acquisition, inheritance or legacy of assets by the remitter and an undertaking by the remitter and certificate by a Chartered Accountant in the formats prescribed by the Central Board of Direct Taxes vide their Circular No.10/2002 dated October 9, 2002. 6.2 Remittance of assets by an NRI/PIO (a) NRI/PIO may rem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount holders and third parties (a) Loans to non-resident account holders and to third parties may be granted in Rupees by authorized dealer / bank against the security of fixed deposits subject to the following terms and conditions: (i) The loans shall be utilised only for meeting borrower's personal requirements and/or business purpose and not for carrying on agricultural/plantation activities or real estate business or for re-lending. (ii) Regulations relating to margin and rate of interest as stipulated by Reserve Bank from time to time shall be complied with. (iii) The usual norms and considerations as applicable in the case of advances to trade/industry shall be applicable for such loans/facilities granted to third parties. (b) Authorised dealer / bank may permit overdraft in the account of the account holder subject to his commercial judgement and in compliance with the interest rate etc. directives. 9. Change of Resident Status of Account holder (a) From Resident to Non-resident When a person resident in India leaves India for a country (other than Nepal or Bhutan) for taking up employment or for carrying on business or vocation outside India or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Reserve Bank; and (ii) remittance outside India of current income in India of the non-resident individual account holder, net of applicable taxes. The resident Power of Attorney holder is not permitted to repatriate outside India funds held in the account other than to the non-resident individual account holder nor to make payment by way of gift to a resident on behalf of the non-resident account holder or transfer funds from the account to another NRO account. 13. Facilities to a person going abroad for studies Persons going abroad for studies are treated as Non- Resident Indians (NRIs) and are eligible for all the facilities available to NRIs. Educational and other loans availed of by them as residents in India will continue to be available to them as per FEMA regulations. 14. International Credit Cards Authorised dealer banks have been permitted to issue International Credit Cards to NRIs/PIO, without prior approval of Reserve Bank. Such transactions may be settled by inward remittance or out of balances held in the cardholder's FCNR/NRE/NRO Accounts. 15. Income-Tax The remittances (net of applicable taxes) will be allowed to be made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing uniform practices, authorised dealers may consider requirements or documents to be obtained by their branches to ensure compliance with provisions of sub-section (5) of section 10 of the Act. Opening of accounts by Bangladesh/ Pakistan entities. Opening of accounts by individuals/entities of Bangladesh / Pakistan nationality / ownership requires prior approval of Reserve Bank. All such requests may be referred to the Chief General Manager, Foreign Exchange Department, (Foreign Investment Division), Reserve Bank of India, Central Office, Mumbai-400 001. Remittance of current income Remittance outside India of current income like rent, dividend, pension, interest, etc. in India of the account holder is a permitted debit to the NRO account. Authorised Dealers may allow repatriation of current income like rent, dividend, pension, interest, etc. of NRIs who do not maintain an NRO account in India based on an appropriate certification by a Chartered Accountant, certifying that the amount proposed to be remitted is eligible for remittance and that applicable taxes have been paid/provided for. Restrictions (a) The remittance facility in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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