Question 1

Can I open an NRO account with an NRE account?

Accepted Answer

Yes, as an NRI, you can open both an NRE (Non-Resident External) and an NRO (Non-Resident Ordinary) account. Many Indian banks offer the convenience of opening both types of accounts at the same time. The process and document requirements for both accounts are generally the same.

Question 2

Can an NRE account be converted to NRO?

Accepted Answer

Yes, an NRE (Non-Resident External) account can be converted to an NRO (Non-Resident Ordinary) account under specific circumstances. This typically occurs when an NRI returns to India and changes their residential status to Resident but Not Ordinarily Resident (RNOR) or Resident.

Here are the main reasons for conversion:

• **Change in Residential Status:** When an NRI returns to India and becomes a resident as per Indian tax laws, their NRE account must be converted to an NRO account.

• **Regulatory Compliance:** According to RBI guidelines, it is not permissible to maintain an NRE account once your residential status changes.

Question 3

Can an NRE account be opened online?

Accepted Answer

Yes, you can open an NRE account online. Many banks in India, such as SBI, Axis Bank, and HDFC Bank, offer online NRE account opening facilities for NRIs. It's always a good idea to check with your preferred bank for their specific online account opening options.

Here are the general requirements and steps for opening an NRE account online:

**NRE Account Opening Documents:**

• **1. Valid proof of identity:**

• Copy of a valid Passport.

• PAN Card or Form 60 (if PAN is unavailable).

• Overseas Citizen of India (OCI) card, Driving License, or Voter ID.

• **2. NRI-Status proof documents:**

• Copy of your Visa. For many Middle Eastern countries, a work permit along with a residence card may be sufficient.

• Work permit or residence permit indicating your NRI status.

• Employment visa or residency permit issued by the government of your host country.

• **3. Valid proof of address:**

• **Overseas address proof:** Utility bills, bank account statements, driving license, government-issued ID card, or credit card bill.

• **Indian address proof (optional, if available):** Aadhaar card, voter ID, driving license, bank statement, or utility bill.

• **4. Other details:**

• Passport-size photograph.

• Initial payment cheque/draft from your foreign bank account (for NRE/NRO accounts) or Indian bank account (for NRO accounts).

• Application for PIS approval (required for stock market investments).

**Important Note:** The documents should be attested by authorized officials of overseas branches of banks registered in India, a notary public abroad, a judge, or the Indian embassy.

**Online NRE Account Opening Process:**

• Visit the official website of your chosen bank and navigate to the NRE account opening page.

• Register with your basic details, then verify your email address and mobile number.

• Fill in your personal information, such as your name, date of birth, nationality, and passport details.

• Enter your addresses in India and abroad.

• Select "NRE account" as the account type.

• Upload the required proof of identity and NRI status documents.

• Complete KYC (Know Your Customer) verification. This may involve a video call with a bank representative if the option is available.

• Make the initial deposit as required by the bank.

• Once all steps are completed and approved, your NRE account will be activated and ready to use.

Question 4

Can an NRE account hold foreign currency?

Accepted Answer

An NRE account is a rupee-denominated account. This means it cannot directly hold foreign currency. However, an NRI can transfer foreign currency to an NRE account, which will then be converted into Indian Rupees (INR) and deposited into the account.

Question 5

Can an NRE account invest in mutual funds?

Accepted Answer

Yes, an NRE (Non-Resident External) account can be used to invest in mutual funds in India.

Unlike some other investments, mutual fund investments do not require PIS (Portfolio Investment Scheme) approval. Therefore, an NRI can use either an NRE or an NRO account for mutual fund investments. The main difference is that funds in an NRE account can be easily repatriated (sent back abroad), while funds in an NRO account are subject to certain repatriation restrictions.

NRIs can invest in mutual funds either directly or through a power of attorney, where another person can invest on their behalf. For more details, you can refer to information on NRI Investment in Mutual Funds.

Question 6

Can an NRE account receive money from India?

Accepted Answer

An NRE (Non-Resident External) account is specifically designed for NRIs to manage their foreign income. Therefore, NRE accounts are primarily intended to receive foreign currency, which is then converted into Indian Rupees (INR) upon deposit.

To receive money from India, NRO (Non-Resident Ordinary) accounts are typically used, as they are designed to manage income earned in India (such as rent, local transfers, or other local earnings). While transfers from NRO to NRE accounts were not permitted until 2012, the RBI relaxed this rule in May 2012, allowing transfers from NRO to NRE accounts subject to certain conditions.

Question 7

How to open NRE account?

Accepted Answer

You can open an NRE account either online or offline.

Here's a general procedure for opening an NRE account:

1. **Obtain the Account Opening Form:** You can get the NRI account opening form from your bank's website or by visiting a branch.
2. **Fill Out the Form:** Complete the account opening form with all necessary details.
3. **Gather Required Documents:** Collect all personal details, identity proof, address proof, and NRI-status proof documents.
4. **Submit Documents:** Submit all the required documents along with the filled-out form.
5. **KYC (Know Your Customer) Verification:** Complete the KYC process as required by the bank.
6. **Make Initial Deposit:** Make an initial deposit to activate your account.
7. **Receive Account Details:** Once your account is approved, you will receive your account details, cheque book, debit card, and internet banking credentials.

For online account opening, you can usually download the form from the bank's website, submit all information and scanned documents online, and complete the KYC verification virtually through a video call.

Question 8

How to open an NRO bank account in India?

Accepted Answer

You can open an NRO bank account in India either online or offline. You'll need to confirm with the bank providing NRI banking services whether they offer online account opening.

Offline account opening typically requires your physical presence, while online account opening can be done from anywhere.

Here are the general steps to open an NRO bank account online:

1. Visit the official website of the bank where you wish to open an NRO account.
2. Select the option to open an NRO account.
3. Enter your personal details and contact information for both India and overseas.
4. Save the information to generate a Customer Reference Number (CRN) and make a note of it.
5. Verify your email address and mobile number, if prompted.
6. Upload the required documents (scanned copies).
7. Complete the KYC verification, which may involve a video call.
8. Once KYC is completed, you will receive an email with your account details.
9. Make the required initial deposit to activate your account.

**Note:** You can also add a nominee to your NRO account. As per regulations, only one nominee per account is permitted, and the nominee can be either a resident or a non-resident.

Question 9

What is an NRE and NRO bank account?

Accepted Answer

An NRE account stands for Non-Resident External account. It's a type of bank account specifically designed for NRIs to manage their foreign income. An NRO account stands for Non-Resident Ordinary account. It's another type of NRI bank account used to manage income generated within India.

For a detailed comparison of the key differences between NRE and NRO accounts, you can refer to specific resources on NRE vs NRO.

Question 10

Can I open an NRO account without an NRE account?

Accepted Answer

Yes, you can open an NRO (Non-Resident Ordinary) account without necessarily having an NRE (Non-Resident External) account.

In fact, an NRI is generally required to open an NRO account as soon as their status becomes NRI. This is because an NRI cannot maintain a regular resident bank account in their name in India. Therefore, an NRI is required to convert their existing resident bank accounts to NRO accounts.

Question 11

Can an NRO account be linked to Demat?

Accepted Answer

Yes, an NRO account can be linked to a Demat account.

If an NRI intends to invest on a non-repatriation basis, they can link their NRO bank account to a Demat account to invest in stock markets, mutual funds, IPOs, rights issues, F&O (Futures & Options), and more.

A Demat account linked with an NRO account becomes an NRI Non-Repatriable Demat account. The proceeds from selling stocks from this linked Demat account, or any corporate action benefits like dividends on shares held in such accounts, will be credited to the linked NRO bank account.

Question 12

Can NRO account be opened online?

Accepted Answer

Yes, NRO accounts can be opened online with many well-known banks in India, such as Axis Bank, HDFC Bank, ICICI Bank, and SBI.

For online account opening, an NRI can typically download the application form from the bank's website, upload scanned copies of attested documents, and complete the KYC verification through a video call.

Question 13

Can an NRO account be used for trading?

Accepted Answer

Yes, an NRO (Non-Resident Ordinary) account can be used for trading in India.

Previously, investing in equity stocks through the secondary market without PIS (Portfolio Investment Scheme) approval was not allowed, meaning only an NRO PIS account could be used for trading. However, the RBI has since relaxed the PIS requirement for the NRO route. This means that now, a regular NRO (Non-PIS) account can also be used for trading. It's important to note that not all brokers may offer trading facilities using an NRO account without PIS, so you should confirm this option with your chosen broker.

NRIs can also use their NRO account to invest in mutual funds, F&O, NCDs (Non-Convertible Debentures), and IPOs.

Question 14

Can NRO account receive money from abroad?

Accepted Answer

Yes, an NRO (Non-Resident Ordinary) account can receive money from abroad.

An NRI can deposit either foreign funds (which will be converted to INR) or Indian income into an NRO account. While there are no restrictions on deposits, the repatriation (sending money back abroad) is subject to certain limits and conditions set by the Reserve Bank of India (RBI). NRIs can repatriate up to USD 1 million per financial year from their NRO account, provided all relevant taxes have been paid.

Question 15

Can NRO account receive money from India?

Accepted Answer

Yes, an NRO (Non-Resident Ordinary) account can receive money from India. The types of income an NRO account can receive include:

• **Income Earned in India:** This covers income such as rent, dividends, pension, interest, and any other income generated within India.

• **Payments from Resident Indians:** Resident Indians can transfer funds to an NRO account for various purposes, including payments for services, sale proceeds, or gifts.

Question 16

Can NRO account send money abroad?

Accepted Answer

Yes, an NRO (Non-Resident Ordinary) account can send money abroad, but there are specific rules and documentation requirements you need to follow. Here are the main points:

• **Annual Transfer Limit:** An NRI may transfer up to USD 1 million per financial year from the balance in their NRO account.

• **Source of Funds:** The source of funds in the NRO account determines the amount that can be transferred. These funds generally include income earned in India, such as rents, dividends, pensions, and interest.

• **Authorizations Required:** Transfers from an NRO account need to be approved by the Reserve Bank of India (RBI).

• **Documentation:**

• Copies of your passport and visa to verify your identity.

• Current Indian income tax returns may be required to ensure tax compliance.

• You must ensure that all applicable taxes on the funds have been paid or deducted at source.

• **Form 15CA and 15CB:** These forms are essential for the remittance process. Form 15CA is a declaration of remittance, and Form 15CB is a certificate from a chartered accountant confirming the tax compliance of the funds being remitted.

• **Bank Forms:** You'll need to complete special forms provided by your bank to process the transfer.

• **Proof of Source of Funds:** Documents showing where the funds in your NRO account originated (e.g., rental agreements, dividend statements).

If you comply with these rules and provide all the required documents, NRIs can remit money abroad from their NRO accounts within the specified limits.

Question 17

How does an NRO account work?

Accepted Answer

An NRO account is primarily used for:

• **Receiving Indian Income:** It's ideal for receiving income earned in India, such as rental income, property income, or dividends from investments.

• **Paying Expenses:** You can use the account to pay for expenses within India, like utility bills, EMIs (Equated Monthly Installments), or for family maintenance.

• **Investments:** NRIs can use their NRO account to invest in Indian stock markets, mutual funds, F&O (Futures & Options), and other financial instruments.

**Key Features of an NRO Account:**

• The account operates in Indian Rupees (INR).

• Funds can be deposited in either Indian or foreign currency (foreign currency will be converted to Indian Rupees at the time of deposit).

• Withdrawals from the NRO account are only allowed in Indian Rupees.

• Repatriation of funds from the NRO account is subject to certain limits and conditions. NRIs can remit up to USD 1 million per financial year after providing necessary documentation and obtaining approvals from the Reserve Bank of India (RBI).

Question 18

What does NRO account mean?

Accepted Answer

An NRO (Non-Resident Ordinary) account is a bank account in India designed for Non-Resident Indians (NRIs) to manage their income earned within India. It allows NRIs to deposit and manage various Indian earnings such as rent, dividends, pensions, and other local income.

While its primary purpose is managing Indian income, an NRO account can also be used for trading and investments in India, often under the Portfolio Investment Scheme (PIS) of the Reserve Bank of India (RBI). Here's how it relates to trading:

• **Trading in Indian Markets:** NRIs can use NRO accounts to trade in Indian stock markets, including buying and selling stocks, mutual funds, bonds, and other securities.

• **Compliance with PIS:** Historically, NRIs needed to register with a designated bank for the Portfolio Investment Scheme (PIS) to invest in the Indian stock market. Transactions under PIS are reported to the RBI. While the PIS requirement for NRO accounts has been relaxed for equity trading, some brokers may still require it, so it's best to confirm with your broker.

• **Taxation:** Capital gains from these trades are subject to tax in India. Short-term and long-term capital gains tax rates will apply based on the holding period of the securities.

• **Repatriation:** Funds from the sale of securities can be repatriated abroad, subject to the overall limit of USD 1 million per financial year after tax compliance.

• **Separate Demat Account:** A separate Demat account linked to the NRO account is required for trading purposes. This ensures that the funds used for trading and the investments made are properly tracked and comply with regulatory requirements.

Question 19

What is NRO bank account?

Accepted Answer

An NRO (Non-Resident Ordinary) account is a bank account in India specifically for Non-Resident Indians (NRIs) to manage their income earned within India. This account is designed to allow NRIs to deposit and manage their Indian earnings, such as rent, dividends, pensions, and other incomes generated in India.

**Key Features of an NRO Account:**

• **Income Sources:** NRIs can deposit their Indian income sources like rent, dividends, and pension into this account.

• **Repatriation:** Funds in an NRO account can be sent outside India, subject to certain limits and conditions. The current limit is up to USD 1 million per financial year, after payment of applicable taxes.

• **Joint Holding:** An NRO account can be held jointly with another NRI or even with a resident Indian.

• **Taxation:** Interest earned on NRO accounts is subject to tax in India. The applicable rate of Tax Deducted at Source (TDS) on interest income is 30% (plus applicable surcharge and cess).

• **Currency:** The NRO account is maintained in Indian Rupees (INR).

• **Account Types:** NRO accounts can be opened as savings accounts, current accounts, recurring deposit accounts, or fixed deposit accounts.

• **Fund Transfers:** NRIs can also transfer funds from an NRE account to an NRO account or deposit foreign funds into an NRO account (which will be converted to INR).

Question 20

What is NRO PIS account?

Accepted Answer

An NRO PIS (Portfolio Investment Scheme) account is a specialized bank account for Non-Resident Indians (NRIs) that enables them to invest in the Indian stock market. Under the Reserve Bank of India's (RBI) Portfolio Investment Scheme, NRIs can buy and sell shares and convertible debentures of Indian companies on recognized stock exchanges in India.

**Key Features of an NRO PIS Account:**

• **Investment Access:** It allows NRIs to invest in Indian stock exchanges (both primary and secondary markets).

• **Repatriation:** Funds from the sale of shares can be repatriated abroad after paying applicable taxes. The overall limit for repatriation from an NRO account is USD 1 million per financial year.

• **Regulatory Reporting:** All transactions under the PIS must be reported to the RBI by the designated bank, ensuring regulatory compliance.

• **Taxation:** Earnings from these investments are subject to Indian taxes. TDS (Tax Deducted at Source) is applicable on capital gains.

• **Dedicated Account:** A separate NRO PIS account is required for routing these investments, which helps in clear tracking and reporting of investments and earnings.

**Process of Opening an NRO PIS Account:**

• **Bank Selection:** Choose a bank authorized by the RBI to offer PIS services.

• **Application:** Fill out the application form provided by the bank for opening an NRO PIS account.

• **Document Submission:** Submit necessary KYC documents such as your passport, visa, proof of address, and PAN card.

• **RBI Permission:** The bank will obtain PIS permission from the RBI on behalf of the NRI.

• **Account Linking:** Link the NRO PIS account with a trading and Demat account for executing trades.

**Benefits of an NRO PIS Account:**

• **Regulated Investments:** Investments are regulated and comply with guidelines set by the RBI and SEBI (Securities and Exchange Board of India).

• **Convenient Investment:** Provides a convenient way for NRIs to invest in Indian equities and convertible debentures.

• **Simplified Compliance:** Ensures proper tracking and reporting of investments and earnings, simplifying compliance with tax regulations.

• **Repatriation:** Allows for repatriation of investment proceeds after tax deductions.

**Note:** The RBI has now relaxed the requirement for PIS through the NRO route, making it no longer mandatory for trading Indian equity stocks. NRIs can trade using their normal NRO accounts, provided their broker offers this facility.

Question 21

Who is eligible for an NRE account?

Accepted Answer

The following individuals are eligible to open an NRE account:

1. **Non-Resident Indians (NRIs):** This includes Indian citizens working abroad, business people residing overseas, and students studying in foreign countries.
2. **Person of Indian Origin (PIO):** An individual who is not a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, or Bhutan, and who:
 • At any time held an Indian passport, or

• Whose parents or grandparents were citizens of India by the Constitution of India or the Citizenship Act, of 1955, or

• Is a spouse of an Indian citizen or a person referred to in the above clauses.
3. **Overseas Citizen of India (OCI):** Foreign nationals of Indian origin who have obtained OCI status from the Government of India.

Question 22

How to open an NRO account?

Accepted Answer

NRI investors can choose to open an NRO account either online or offline. The NRO account can be PIS-enabled or investors can choose to make it a non-PIS account. Investors typically need to download the application document from the bank’s website.

Here are the general documents and steps required:

1. **Completed Application Form:** The application form must be signed and attested by your banker, the Embassy of India, a public notary, or any person known to the bank. It must be accompanied by:
 • Copy of your passport, along with photocopies of address proof and passport expiry date.

• Copy of your Visa. For many countries in the Middle East, a work permit along with a residence card may be sufficient.

• One passport-size photograph of each applicant.
2. **Valid Proof of Identity:** PAN card, driver's license, passport, or Voter ID.
3. **Valid Proof of Address:**

• **Overseas Address Proof:** Photocopy of valid passport stating the overseas address, utility bill, overseas bank statement, valid driving license, government-issued ID card, or credit card bill.

• **Indian Address Proof (Optional for OCI/PIO):** Aadhaar Card, Voter ID, Driving License, Bank Statement, or Utility bill.
4. **NRI Status Proof:** Valid work permit/visa, or residency permit issued by the government of the host country.
5. **Contact Information and Bank Account Details:** Details of the applicant’s bank account.
6. **PAN Card:** It is mandatory irrespective of residential status.
7. **Photograph:** As per the Account Opening Form requirement.
8. **Attestation for Non-Face-to-Face Cases:** If the individual cannot visit a branch to open the account, all photocopies of the above documents need to be self-attested by the customer and further attested by the Indian Embassy, a Notary, or a Banker overseas. (This applies to all documents).
9. **PIS, Trading, and Demat Accounts:** The account opening form and the above documents are mandatory to open PIS, Trading, and Demat Accounts.
10. **Foreign Passport Holders:** In the case of a foreign passport, it needs to be accompanied by an OCI/PIO Card with a matching passport number.
11. **PIS Permission Letter:** If applicable, a PIS permission letter from the bank (issued by RBI).

Question 23

Where can NRIs invest in India?

Accepted Answer

NRI investors have a wide range of investment options in India, similar to resident Indians, subject to specific norms. These include:

• Derivatives, Futures & Options

• Bonds

• Stocks (equity shares investment)

• Mutual Funds

Question 24

Who is eligible for an NRI account?

Accepted Answer

All non-resident Indians are eligible to open an NRI account, subject to the norms and changes suggested by the authorities. The following criteria generally need to be met:

• An individual who is employed, owns a business, or practices some form of business outside India for more than 182 days in a financial year.

• Indian government employees who hold diplomatic passports and are posted abroad.

• Students studying abroad.

• Seafarers working on international voyages.

• Indian employees of an oil rig situated in a foreign country who stay outside India for more than 182 days.

Question 25

What documents are required for an NRI account?

Accepted Answer

The documents required for opening an NRI trading account and a Demat account are generally the same.

The most important documents that NRI investors should have ready for opening a trading account are:

• The PIS Permission Letter from the respective designated bank for trading on a repatriation basis (if applicable).

• A cancelled cheque from your PIS FEMA NRE/NRO bank account.

• PAN Card.

• **Overseas Address Proof:** Driving License, foreign passport, utility bills (not more than 2 months old), notarized copy of rent agreement/leave & license agreement, or sale deed.

• Photograph of the investor.

• Proof of respective bank accounts and depository accounts.

• Account opening fee cheque + Demat Account Opening Fee cheque.

• Duly signed account opening forms.

NRI investors must additionally keep the following important considerations in mind regarding identity documents:

Identification Documents	NRI Status Holder	PIO/OCI Status Holder
Proof of Status	Valid Visa/Work Permit	Valid PIO Card, Valid OCI Card, Marriage Certificate
Proof of Identity	Relevant passport pages with identity details	Relevant passport pages with identity details
Current Address Document	Overseas address proof	Same as NRI
Proof of Permanent Address	Passport, Driving License, Voter ID, Aadhaar	Relevant passport pages
Additional Proof	Overseas bank cheque, Cancelled/Paid Cheque, Income proof	Same as NRI
Other Requirements	2 passport photos, Certified English document translations	Same as NRI

NRI Banking Accounts Explained

NRE Bank Account

NRE Account Features

NRE Account Types

1. NRE PIS Account

Advantages of NRE PIS Account

Disadvantages of NRE PIS Account

2. NRE Non-PIS Account

Advantages of NRE Account (Non-PIS)

Disadvantages of NRE Account (Non-PIS)

NRO Bank Account

NRO Account Features

NRO Account Types

1. NRO PIS Account

Advantages of NRO PIS Account

Disadvantages of NRO PIS Account

2. NRO Non-PIS Account

Advantages

Disadvantages

NRI Account Opening Documents

NRI Bank Account Opening Process

1. Offline Account Opening Process for NRE and NRO Account

2. NRE and NRO Account Online Opening

NRI Bank Account Charges

1. Balance Maintenance Criteria

2. NRE/NRO Account Maintenance Charge

3. ATM Charges

4. Debit Card Charges

5. Internet Banking Hardware Token

6. Cash Transaction Charges

7. Cheque Book Charges

8. Transfer Charges

9. Convenience Fees

10. Transaction Failure Charges

11. Outstation Cheque Collection Charges

12. Remittance Charges

13. MC/DD/Cheque Related Charges

14. Service Requests Charges

NRI PIS Charges

1. PIS Issuance Charges

2. PIS AMC (Annual Maintenance Charges)

3. PIS Reporting Charges

4. Non-PIS Reporting Charges

FCNR Bank Account

Frequently Asked Questions