NRI FAQs

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NRI FAQs

Who is an NRI?

  • Section 2(w) of FEMA, 1999 defines a ‘Person resident outside India’ as a Person who is not resident in India.

An individual shall be deemed to be a non-resident in following cases:

  • When Person goes or stays outside India for any of the following purposes:
    • For or on taking up employment outside India, or
    • For carrying on outside India a business or vocation outside India, or
    • For any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period.

Who is a ‘PIO’?
‘Person of Indian Origin’(PIO) means an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan) who

  • at any time, held an Indian Passport or
  • who or either of whose father or mother or whose grandfather or grandmother was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).

Who is Resident but not Ordinarily Resident (RNOR)?

  • A Non Resident who has returned to India for good is covered under the provisions of section 6(6) of the   Income-tax Act. He/She is given a special status of RESIDENT BUT NOT ORDINARILY RESIDENT (RNOR) if he/she satisfies one of the following conditions:
Condition Status
The person is Non-Resident, as per the above provisions, for at least 9 out of 10 previous years prior to the previous year under consideration. If yes, the person is RNOR
The person’s stay in India during the 7 previous years prior to the previous year under consideration should be 729 days or less. If yes, the person is RNOR

A person who is returning to India after 9 years of stay outside India (and who was non-resident for each of the 9 years under the Income Tax Act, 1961), shall remain RNOR for the period  of two years only.

What are the different types of Accounts permitted to be maintained by Non Resident Indian?

  • NRE or NRO Current / Savings Banks / Recurring Deposit / Fixed Deposits Accounts in Indian Rupees.
  • FCNR (B) Term Deposits in USD, EURO, GBP, CAD and AUD.

What is the tenure for the various NRI Deposits?

Deposit NRE NRO FCNR (B) RFC
Time Period
for TDR/STDR
Min: 1 year Min: 7 Days Min: 1 year Min: 1 year
Max: 10 years Max: 10 years Max: 5 years Max: 3 years

How to open an NRI account from abroad?

  • Please download NRI Account opening form from our website
  • Fill the application form and get it attested by Indian Embassy or Indian Consulate or Indian High Commissioner or Banker or Notary Public or A Person knwon to the Bank i.e. Other Account holders.
  • Submit the application form along with attested copies of following documents for KYC verification and initial remittance to a branch of your convenience in India. Please also indicate branch of your choice, where you intend to open an Account in India.
status Proof of Identity (Both mandatory) Address Proof mentioning the current Overseas address

(Any one)

NRI
  • Copy of the relevant pages of Passport
  • Copy of valid Visa / Work Permit
  • Copy of relevant pages of Passport
  • Copy of Telephone/  Electricity Bill of the place of location abroad
  • Original copy of latest bank statement of account overseas
  • Copy of Employee ID Card
  • Copy of Labour Card
  • Copy of Social Security Card
PIO / OCI
  • Copy of the relevant pages of Passport
  • Any one of the following:
  1. Copy of PIO/OCI Card
  2. Copy of relevant parents of Passport of parents/grand parents.
  3. Copy of Marriage Certificate

Can NRI / PIO open a Joint Account?

Type of Account Joint Account with Resident Indians

(Resident Close Relative only – as defined in Sec 6 of Companies Act, 1956 )

Joint Account with NRIs or PIOs
NRO Yes ( Former or Survivor only) Yes
NRE Yes ( Former or Survivor only) Yes
FCNR (B) Yes ( Former or Survivor only) Yes
RFC Yes ( Former or Survivor only Yes

Can an NRI authorise a close relative to operate his NRE Account?

  • Yes, by giving a Letter of Authority in the specified format to the Branch in which you are  having Account. The authority to operate the Account is only for local disbursements. The close relative who is authorised will not have the power to make gifts, transfer the Account or close the Account
  • Click here to download Letter of Authority

Are Power of Attorney Holders allowed to credit proceeds of foreign currency notes, bank notes and travellers cheques to the NRE accounts?

  • Power of Attorney Holders are not allowed to credit proceeds of foreign currency notes, bank notes and travellers cheques to the NRE Accounts

Is the permission of the Reserve Bank required for opening NRI Accounts by Bangladesh / Pakistan individuals/entities?

  • Opening of accounts by individuals/entities of Pakistan and entities of Bangladesh nationality requires prior approval of the Reserve Bank

What is the difference between NRE and NRO Accounts?

  • The interest income earned on NRO attracts Income Tax deduction at source in India, whereas interest income in NRE is tax free in India.
  • Balances held in NRE Accounts can be fully repatriated abroad, whereas funds in NRO Account are partially repatriable (up to USD 1 million per financial year), subject to payment of taxes.
  • Funds remitted from abroad or local funds which can otherwise be remitted abroad to the Account holder can be credited to NRE accounts. Funds which do not qualify, under the Exchange Control Regulations, for remittance outside India are required to be credited to NRO Accounts.

Can I transfer funds from NRE to NRO Account and vice versa?

  • Transfer from NRE to NRO: Transfer of funds from an NRE to an NRO Account is permitted. Once you transfer funds from NRE to NRO Account, the funds become conditionally-repatriable (up to USD one million or equivalent per financial year), subject to payment of taxes, as applicable.
  • Transfer from NRO to NRE: Transfer of funds from NRO to NRE Account is permitted within the overall ceiling of USD one million or equivalent per financial year (April – March), subject to payment of taxes, as applicable. You need to submit Form 15CA (online application form) and 15CB (Chartered Accountant Application) to your Branch for transferring funds.

Can an NRI transfer funds between NRE and FCNR (B) Accounts?

  • Yes, the funds can be transferred between NRE and FCNR (B) accounts of an Account holder and also between NRE and FCNR (B) Accounts of two different NRIs, i.e., the funds lying in NRE and FCNR (B) Accounts of an NRI can be freely transferred to NRE and FCNR (B) Account of any other NRI.

What amounts can be credited to NRO accounts?

  • Proceeds of remittances from outside India through normal banking channels received in foreign currency which is freely convertible
  • 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 (CDF). Rupee funds should be supported by encashment certificate, if they represent funds brought from outside India.
  • Transfers from Rupee Accounts of Non-Resident Banks
  • Legitimate dues in India of the Account holder. This includes current income like rent, dividend, pension, interest, etc.
  • Sale proceeds of assets including immovable property acquired out of rupee / foreign currency funds or by way of legacy / inheritance.

How much funds can be transferred out of NRE / NRO / FCNR (B) Account to beneficiary Account overseas?

  • NRE / FCNR (B) Account: Funds up to any limit can be transferred.
  • NRO Account: Funds up to USD 1 million per financial year can be transferred, subject to payment of taxes, as applicable.

Do I have to pay any taxes on the funds in my NRE Savings Account?

  • As per current guidelines, Interest earned on funds in NRE Savings Account are exempted from Income tax in India.

What’s the difference in the tax treatment for Interest earned on an NRE and an NRO Account?

  • The Interest earned on any type of NRO Term Deposits and Saving Accounts are taxed as per the Account holder’s tax bracket. On the other hand, Interest earned on the NRE Account is totally exempted from Income Tax.
  • However, NRIs can avail benefit of DTAA (Double Taxation Avoidance Agreement) by submitting “Tax Residency Certificate” and a “Self-Declaration”

If no Tax Residency Certificate / DTAA is submitted by the Depositor, then Income Tax at a rate of 30.90% will be deducted at source on Interest earned in the NRO Accounts irrespective of the amount of Interest.

  • Click here to download Self-Declaration form  ( DTAA)/ DTAA Countries /TDS Rates

Are FCNR Accounts permitted to be maintained in the form of Current/Savings Accounts?

  • No. FCNR Accounts can be maintained only in the form of `Term Deposits, i.e. a Deposit kept for fixed periods ranging from 12 months to 60 months.

Can an FCNR Deposit in one currency be converted to a Deposit in another currency?

  • Yes. However, it would be advisable to do so only on maturity of the Deposit so that there is no loss of Interest.

Can FCNR / NRE deposits be value dated?

  • Deposits are value dated. The date will be the date on which the funds are received by State Bank of Hyderabad in its various Nostro Accounts.

Can FCNR (B) Deposits be closed pre-maturely?

  • FCNR (B) Deposit can be closed prematurely subject to:
Period Run Interest-norm
Before the minimum period of 1 year irrespective of the month No interest is payable.
After the minimum period of 1 year for Foreign Currency equivalent upto USD 10000 No penalty.

Interest is payable at the rate applicable for the period the deposit has actually run.

After the minimum period of 1 year for the Foreign Currency equivalent above USD 10000 Interest is payable at the rate applicable for the period the deposit has actually run less the penal provisions of 1%.

Are NRO or NRE or FCNR (B) Account holders eligible for loans or overdrafts against their Fixed Deposits?

Yes, permitted for:

  • Personal purposes
  • Business activity (except for the purpose of re-lending, carrying on agricultural/plantation activities or for investment in real estate business).
  • Loans against NRE/FCNR fixed deposits can, however, be utilized for direct investments in India on non-repatriation basis, in certain specified areas and for acquisition of flats/houses in India subject to prescribed conditions.

Can I convert my Resident Account to NRO Account?

  • Yes, you can convert your Resident Account to NRO Account. According to FEMA guidelines, when an individual changes his residential status from ‘Resident’ to ‘Non-Resident’, he must re-designate his Resident Account as an NRO (Non-Resident Ordinary) Account. To re-designate your Resident account, download the account opening form from our website or it can be obtained from any branch nearby. Please fill the form and submit along with the relevant documents to the branch of your choice in India.

Is nomination facility available?

  • Yes, nomination facility is available for all NRI Products. The Account holder needs to fill in the requisite form DA1, which forms a part of NRI Account opening form. You may also download nomination form and send it to your branch for them for recording the same
  • Click here to download Nomination form

Are funds in NRE / NRO / FCNR (B) Accounts repatriable?

  • Funds in NRE / FCNR (B) Deposits Accounts are fully repatriable, whereas funds from NRO Account are partially repatriable (up to USD 1 million per financial year).

Under liberalised norms, how much money can an NRI remit abroad annually from NRO Account?

  • An NRI can remit up to USD 1 million (or equivalent) per financial year, subject to payment of taxes and on production of certificate from a Chartered Accountant and undertaking as per RBI / GOI guidelines.

Can Fixed Deposits be closed prematurely?

  • For NRE Term Deposits, premature withdrawals permitted (conditional):
  • On pre-mature withdrawal of the Deposit (after completion of 1 year), Interest will be calculated at applicable rate for the period the Deposit has actually remained with the Bank less applicable penalty as under:-
NRE term Deposits opened Penalty
Before 01.04.2013 1%
From   01.04.2013 No Penalty
  • No Interest is payable, if the Deposit is withdrawn before one year.

Will the penalty be waived if the Deposit is closed for redeployment in another scheme of the Bank?

  • Yes. No penalty is levied if the deposit is closed prematurely for redeployment in another scheme of our Bank.

What is a Resident Foreign Currency Account Scheme?

  • The Resident Foreign Currency Account facilitates investment of funds for those NRIs / PIOs who have returned to India for permanent settlement (Returning Indians).

What are the amounts that can be credited to RFC a/c?

  • The Sale / Maturity proceeds of assets held abroad income on them
  • Pension received abroad.
  • Currency notes / TCs brought into India at the time of returning to India.
  • Balances held in FCNR / NRE a/cs

Will any penalty be levied on premature closure of NRE / FCNR (B) fixed deposits and crediting to RFC Account?

  • No penalty will be levied for premature closure of NRE / FCNR (B) fixed Deposit and crediting to RFC Account. However, the Deposit so closed will earn interest at the rate applicable for the period for which it has run.

In what currencies are RFC account denominated?

  • RFC Accounts are denominated in USD

Can foreign currency notes be credited into an RFC Account?

  • Yes. Foreign Currency notes can be credited into RFC Account. For amount exceeding USD 5000 or its equivalent, customer needs to submit copy of Currency Declaration certificate.

Can Traveller’s cheques be credited into an RFC Account?

  • Yes, traveller’s cheque can be credited into RFC Account. For amount exceeding USD 10,000 or equivalent, customer needs to submit copy of Currency Declaration certificate.

Can the funds in RFC Accounts be used for making local payments?

  • Yes, funds in RFC Accounts can be used for making local payments. However, you have to convert your funds from RFC Deposit to domestic Savings Bank Account for making local payments.

Can a returning Indian transfer funds RFC Accounts to NRE / FCNR (B) Account while going abroad again?

  • Yes. 

Is the amount in RFC Accounts fully repatriable?

  • Yes.

Can RFC Accounts be opened jointly?

  • Yes, RFC Accounts are permitted to be held jointly with a resident close relative as defined in the Companies Act, 1956 as Joint Holder on ‘Former or Survivor’ basis.

For how many years can an RFC Account be held?

  • RFC Account can be maintained for any length of period.

On permanent return to India, can the NRI retain his assets abroad?

  • Yes, on return to India, NRI need not declare or surrender their foreign currency assets and the income earned thereon

Is interest income on RFC Account taxable?

  • Interest Income on RFC Account is taxable when the Account holder loses RNOR (Resident not Ordinarily Resident) status and becomes an Ordinary Resident.

Are the balances held in NRE or FCNR (B) account permitted to be credited to RFC account? Is the NRI required to satisfy any minimum period of NRI status for the above purpose? How long is the NRI permitted to maintain RFC account once he becomes a resident?

  • The balances held in NRE or FCNR (B) Account can be credited to RFC Account on the change of the status of the account holder from a Non-Resident to a Resident. Under the current FEMA regulations, the Non-Resident Indian is not required to satisfy a minimum period of stay of one year.
  • A person can maintain an RFC Account, once NRI becomes a resident Indian for any length of time as long as he remains to be a resident. If his/her status changes once again from Resident to Non-Resident, the funds held in RFC Account are allowed to be freely remitted abroad or credited to fresh NRE or FCNR (B) Account. However, the current regulation under FEMA is silent about the above provision.
  • The treatment of deducting tax at source on interest on RFC Account is similar to Domestic Term Deposits. However, it is possible for a person, whose status under the Income Tax Provision is Resident but not Ordinarily Resident to claim that the Interest on Term Deposits is not liable to tax under the provisions of Section 10 of the Income Tax Act, 1961. The individual should furnish Form 15AA, if he/she does not require the bank to deduct tax at source.

How to apply online banking?

  • Online Self Registration of Internet Banking facility to NRIs:

Under this facility, an NRI Customer, not applied for Internet Banking earlier or don’t have Internet Banking can self-register for INB facility through online banking with hassle free process. The self-registration facility has been made available on the pre-login page of Bank’s INB platform (www.onlinesbh.com). The Customer has to fill in few details and thereafter, with the help of One Time Password (OTP) approval, the System will generate Temporary Username and prompts to create Temporary Password. Then, a System generated registration form is to be submitted to the branch concerned for approval

  • Click here for Self Registration Internet Banking Facility Process Flow

What is Swift?

  • Society for Worldwide Interbank Financial Telecommunication (SWIFT) is a worldwide network for financial messages, through which its members (i.e. financial institutions such as banks) can exchange messages related to money transfer for their customers. The messages are sent securely and reliably to the target member financial institution of SWIFT.
  • Click here to Download  Swift formats.

Does the Bank has any dedicated Relationship Managers at Branches for NRI Services?

  • Yes. Bank has dedicated Relationship Managers for NRIs at major centres for Personalized Services.
  • Click here for details of dedicated Relationship Managers at Branches.

Does the Bank has any Relationship Managers Abroad?

  • Yes. Bank has deputed Relationship Managers in the Middle East for extending Personalized NRI Services and resolving various issues with Branches.
  • Click here for details of Relationship Managers Deputed to the Middle East Countries.

Does the Bank has any Representative or Foreign Office Abroad?

  • Yes. Bank has operationalized its first Overseas ‘Representative Office’ at Dubai UAE as ‘Principal Representative of the Bank in UAE, to facilitate NRIs in resolving various issues with Branches and extending Personalized Services.
  • Click here for Representative Office Contact Details.

What are modes for placing the disposal of Inward Remittance?

  • Now, you can place a request for disposing off a remittance expected into your NRE/NRO Account with us.
  • It will serve three purposes, as mentioned below:
    • Tracking and disposal of fresh remittance
    • Creation of multiple deposits
    • Request for creation of FCNR (B) Deposits

To use this facility, please go to ‘Inward Remittance Disposal Request’ under ‘NRI Services’ tab of ‘e Services’ in the menu bar of your Internet Banking Account

  • Click here for Inward Remittance Disposal Request Process Flow

What are modes for placing the request for Outward Remittance?

Request for Outward Remittance can be placed in any of the following manner:

  • Internet Banking (INB): Using INB, funds can only be transferred out of NRE Savings Bank Account. For the purpose, please add beneficiary to whom you wish to transfer funds and then place a request for remittance in his / her favour, as per the procedure mentioned below:
    • Procedure to add beneficiary for remittance:
      • Please login to your INB account
      • Click on ‘Profile’ tab
      • Enter your profile Password
      • Click on ‘Manage Beneficiary’
      • Click on ‘Outward Remittance Beneficiary from NRE Account’
      • Enter details of beneficiary and submit it after entering OTP sent on your registered mobile number
    • Procedure for remittance:
      • Please login to your INB account
      • Click on ‘e-Services’ tab
      • Click on ‘NRI Services’ on left hand side column
      • Click on ‘Outward Remittance from NRE’
      • Please select / enter request details and click on Submit
  • Through branch: You can courier/post or submit in a person a written request letter to your home branch for remitting funds.
    • Click here for Outward Remittance from NRE Account Process Flow

What are the other facilities available to NRIs/PIOs?

Investment in Immovable Property

  • NRI / PIO may acquire/transfer immovable property in India other than agricultural land/ plantation property or a farm house out of repatriable and / or non-repatriable funds.
  • The payment of purchase price, if any, should be made out of
    • funds received in India through normal banking channels by way of inward remittance from any place outside India or
    • funds held in any non-resident account maintained in accordance with the provisions of the Act and the regulations made by the Reserve Bank
  • No payment of purchase price for acquisition of immovable property shall be made either by traveller’s cheque or by foreign currency notes or by other mode other than those specifically permitted as above
  • NRI may acquire any immovable property in India other than agricultural land / farm house plantation property, by way of gift from a person resident in India or from a person resident outside India who is a citizen of India or from a person of Indian origin resident outside India
  • NRI may acquire any immovable property in India by way of inheritance from a person resident outside India who had acquired such property in accordance with the provisions of the foreign exchange law in force at the time of acquisition by him or the provisions of these Regulations or from a person resident in India
  • An NRI may transfer any immovable property in India to a person resident in India
  • NRI may transfer any immovable property other than agricultural or plantation property or farm house to a person resident outside India who is a citizen of India or to a person of Indian origin resident outside India.

In respect of such investments, NRIs are eligible to repatriate:

  • The sale proceeds of immovable property in India if the property was acquired out of foreign exchange sources i.e. remitted through normal banking channels / by debit to NRE / FCNR (B) account
  • The amount to be repatriated should not exceed the amount paid for the property in foreign exchange received through normal banking channel or by debit to NRE account (foreign currency equivalent, as on the date of payment) or debit to FCNR (B) account.
  • In the event of sale of immovable property, other than agricultural land / farm house / plantation property in India, by a person resident outside India who is a citizen of India / PIO, the repatriation of sale proceeds is restricted to not more than two residential properties subject to certain conditions
  • If the property was acquired out of Rupee sources, NRI or PIO may remit an amount up to USD one million per financial year out of the balances held in the NRO account (inclusive of sale proceeds of assets acquired by way of inheritance or settlement), for all the bonafide purposes subject to tax compliance.

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