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Master Circular on Non-Resident Ordinary Rupee (NRO) Account

FEMA - 02/2015-16 - Dated:- 1-7-2015 - RBI/2015-16/78 Master Circular No. 2/2015-16 July 1, 2015 To, All Authorised Dealer Category - I banks and Authorised banks Madam / Sir, The acceptance of deposits by an Authorised Dealer /Authorised bank from persons resident outside India is regulated by the provisions of sub-sections (1) and (2) of section 6 of the Foreign Exchange Management Act, 1999 read with FEMA Notification No.5/2000 - RB dated May 3, 2000, as amended from time to time. 2. This Mas .....

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sed Dealer Category - I banks and Authorized banks may refer to respective circulars / notifications for detailed information, if so needed. Yours faithfully, (A K Pandey) 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 p .....

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eserve Bank APPENDIX 1. Definitions Non-Resident Indian (NRI) NRI for this purpose is defined in Regulation 2 of Notification No. FEMA 5/2000- RB dated May 3, 2000. In terms of this Notification, an NRI means 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 Notification ibid as a citizen of any country other than Bangladesh or Pakistan, if (a) he at any time held Indian .....

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nsactions denominated in Indian Rupees, not involving any violation of the provisions of FEMA, Rules and Regulations made there under. (b) Opening of accounts by individuals/ entities of Pakistan nationality/ ownership and entities of Bangladesh ownership requires prior approval of the Reserve Bank. (c) Opening of accounts by individual/s of Bangladesh nationality may be allowed by Authorised Dealer or Authorised Bank, subject to satisfying itself that the individual/ s hold a valid visa and val .....

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ents / 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 f .....

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who is a close relative of the resident individual [close relative as defined in Section 6 of the Companies Act, 1956] by way of crossed cheque /electronic transfer. The amount shall be credited to the Non-Resident (Ordinary) Rupee Account (NRO) a/c of the NRI / PIO and credit of such gift amount may be treated as an eligible credit to NRO a/c. The gift amount would be within the overall limit prescribed under the Liberalised Remittance Scheme (LRS) for a resident individual. (vii) Resident indi .....

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All local payments in rupees including payments for investments in India subject to compliance with the relevant regulations made by the Reserve Bank. (ii) Remittance outside India of 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), by NRI, subject to payment of tax, as applicable. (iv) Transfer to NRE account of NRI within the overall ceiling of USD one million per financial yea .....

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financial year out of the balances in the account, 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 Central Board of Direct Taxes from time to time. 7. Foreign nationals of non-Indian origin on a visit to India NRO (current/savings) account can be opened by a foreign national of non-Indian origin visiting India, with funds remitted from outside India through banking channel or by sale of .....

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balance will have to be made by the account holder concerned on plain paper to the Regional Office concerned of the Reserve Bank. 8. Grant of loans / overdrafts by the Authorised Bank to account 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 req .....

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t of the account 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 .....

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e-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 intention to stay in India for an uncertain period. Where the account holder is only on a temporary visit to India, the account should continue to be treated as non-resident during such visit. 10. Treatment of loans /overdrafts in the event of change in the residential status of the borrower In case of a person .....

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nt nominee from the NRO account of a deceased account holder shall be credited to NRO account of the nominee with an Authorised dealer / bank in India. 12. Operation of NRO account by Power of Attorney holder Powers have been delegated to the Authorized Dealers/ Authorised banks to allow operations on an NRO account in terms of a Power of Attorney granted in favour of a resident by the non-resident individual account holder provided such operations are restricted to: (i) All local payments in Ru .....

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e non- resident account holder or transfer funds from the account to another NRO account. 13. 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 (B) / NRE / NRO Accounts. 14. Income-Tax The remittances (net of applicable taxes) will be allowed to be made by the Authorised Dealer banks on .....

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lace 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 Building, Jai Singh Road, New Delhi - 110 001 E Mail. ii. The report shall contain details of Name/s .....

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