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 ..... ed Persons and the Authorised Dealer Category I banks may refer to respective circulars/ notifications for detailed information, if so needed. Yours faithfully (C D Srinivasan) Chief General Manager INDEX 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 the Authorised Bank to account holders and third parties 9. Change of resident status of account holder 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccounts and guidelines for opening, operating and maintenance of such accounts shall be in accordance with directives/instructions issued by the Reserve Bank from time to time. 4. Joint Accounts with Residents / Non- Residents The accounts may be held jointly with residents and / or with non-residents. 5. Permissible Credits / Debits A. Credits (i) Proceeds of remittances from outside India through normal banking channels received in any permitted currency. (ii) Any foreign currency, which is freely convertible, tendered by the account holder during his temporary visit to India. Foreign currency exceeding USD 5000 or its equivalent in the form of cash should be supported by currency declaration form. Rupee funds should be supported by encashment certificate, if they represent funds brought from outside India. (iii) Transfers from rupee accounts of non-resident banks. (iv) Legitimate dues in India of the account holder. This includes current income like rent, dividend, pension, interest, etc. (v) Sale proceeds of assets including immovable property acquired out of rupee / foreign currency funds or by way of legacy /inheritance. (vi) Resident indiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xes as prescribed by Central Board of Direct Taxes from time to time. 6.2 Remittance of assets by an NRI/PIO (a) NRI/PIO may remit an amount, not exceeding USD one million per financial year, out of the balances held in NRO accounts / sale proceeds of assets / the assets in India acquired by him by way of inheritance / legacy on production of documentary evidence in support of acquisition, inheritance or legacy of assets by the remitter, subject to payment of taxes as prescribed by CBDT from time to time. (b) NRI/PIO may also, within the overall limit of USD one million, as stated above, remit sale proceeds of assets acquired under a deed of settlement made by either of his parents or a close relative (as defined in Section 6 of the Companies Act, 1956 ) and the settlement taking effect on the death of the settler, on production of the original deed of settlement, subject to payment of taxes as prescribed by CBDT from time to time. 6.3 Assets acquired in India out of Rupee funds NRI/PIO may remit sale proceeds of immovable property purchased by him as a resident or out of Rupee funds as NRI/PIO, without any lock-in-period, subject to the above limit of USD 1 m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt holder subject to their commercial judgement and in compliance with the interest rate etc. directives. 9. Change of residential status of account holder (a) From Resident to Non-resident (i) 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 for any other purpose indicating his intention to stay outside India for an uncertain period, his existing account should be designated as a Non- Resident (Ordinary) Account. (ii) Foreign nationals who come to India on employment and become residents in terms of section 2 (v) of FEMA, 1999 and are eligible to open/hold a resident savings bank account are permitted to re-designate their resident account maintained in India as NRO account on leaving the country after their employment to enable them to receive their legitimate dues subject to certain conditions. (b) From Non- resident to Resident NRO accounts may be re-designated as resident Rupee accounts on return of the account holder to India for taking up employment, or for carrying on business or vocation or for any other purpose indicating his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out prior approval of Reserve Bank. Such transactions may be settled by inward remittance or out of balances held in the cardholder s FCNR (B) / NRE / NRO Accounts. 15. Income-Tax The remittances (net of applicable taxes) will be allowed to be made by the Authorised Dealer banks on production of requisite information in the formats prescribed by the Central Board of Direct Taxes, Ministry of Finance, Government of India from time to time. Reserve Bank of India will not issue any instructions under FEMA, 1999 clarifying tax issues. It shall be mandatory on the part of Authorised Dealers to comply with the requirement of tax laws, as applicable. 16. System of quarterly reporting of opening of NRO accounts by individual/s of Bangladesh: i. The Authorised bank should put in place a system of quarterly reporting whereby each branch of the Authorised bank shall maintain a record of the bank accounts opened by individual/s of Bangladesh nationality and details of such account shall be forwarded to their Head Office. The Head Office of the bank shall furnish details of such accounts on quarterly basis to the Under Secretary (Foreigners), Ministry of Home Affairs, NDCC-II ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6, 2002 8. A.P. (DIR Series) Circular No.59 December 9, 2002 9. A.P. (DIR Series) Circular No.67 January 13, 2003 10. A.P. (DIR Series) Circular No.43 December 8, 2003 11. A.P. (DIR Series) Circular No.45 December 8, 2003 12. A.P. (DIR Series) Circular No.62 January 31, 2004 13. A.P. (DIR Series) Circular No.43 May 13, 2005 14 A.P. (DIR Series) Circular No.12 November 16, 2006 15. A.P. (DIR Series) Circular No.64 May 25, 2007 16. A.P. (DIR Series) Circular No.70 June 09, 2011 17 A.P. (DIR Series) Circular No.17 September 16, 2011 18 A.P. (DIR Series) Circular No.18 September 16, 2011 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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