Non-Resident Accounts

1. Non-Resident Accounts Ashit Hegde

2. Non-Resident (external) Rupee account. – • Popularly known as NRE a/c, this a/c is maintained as a Savings a/c or as a Term Deposit a/c. Current a/cs are also permitted. Only NRIs and PIOs are permitted to open this a/c. Permitted Credits – • Remittance from abroad. • NRI’s Indian income (e.g. rent, dividends, pension etc.) • Transfer from other NRE and FCNR a/cs. Ashit Hegde

3. Repatriation  Freely permitted Local Payments  Freely permitted Exchange Risk  Borne by the NRI/PIO Rate of interest (w.e.f March 1st, 2014) Should not be higher than comparable domestic deposit. Ashit Hegde

4. Non-Resident Ordinary A/c (NRO) • Maintained in INR as savings, current, recurring and term Deposits. Permissible credits – • Remittance from abroad. • Legitimate dues in India. E.g. Rent dividend, interest etc. • Sale proceeds of assets including immovable property. • Gifts or loans from close relative residents up to USD 75,000/- under LRS permitted. Ashit Hegde

5. Permitted Debits – • All local payments. • Remittance outside India of current Income..subject to Income Tax. • Remittance up to USD one million per F.Y. Foreign Nationals of Non-Indian origin visiting India may open NRO A/cs using funds brought from abroad. Ashit Hegde

6. Foreign Currency Non-Resident (B) Deposits {FCNR (B) Deposits} Eligible Depositors - NRIs and PIOs Currencies - USD,GBP,EURO,JPY,AUD,CAD Nature of A/c - Only Term Deposits Period - Minimum - One year Maximum – Five years Ashit Hegde

7. Rate of Interest Ceiling Rates 1 year to less than 3 years LIBOR plus 200 basis points. 3 years to 5 years LIBOR plus 300 basis points(w.e.f March 1, 2014) Periodicity of Payment - At intervals of 180 days. Compounding permitted. Ashit Hegde

8. Prepayment - No interest is payable if prepaid before one year. After one year, prepayment will be subject to penal interest. Loans against Deposit - Permitted. Banks are free to decide interest rate. Repatriation - Principal and interest freely permitted Ashit Hegde

9. On depositors permanent return to India - If desired by the depositor, the deposit may continue till maturity in the same currency at the contracted interest rate. A resident can continue to hold, own, and transfer Foreign Security or immovable property situated outside India which was acquired when he was resident outside India. Ashit Hegde

10. Exchange Earners’ Foreign Currency A/c (EEFC) Meant for – Resident persons who are earning Forex. Nature of a/c – Current a/c. Objectives served – To save on conversion/ transaction costs. Eligible Credits – 100% of Forex Ashit Hegde

11. Utilisation – For all approved purposes. E.g. Import bill retirement, Outward Remittances, PCFC Liquidation. Conditions – • No credit facility against EEFC balance. • Net balance at the end of the month should be converted into INR before the end of succeeding month • The a/c is not intended to enable Forex earners to maintain assets in F.CY. Ashit Hegde

12. Remittance Facilities to Non-Resident Indians/PIOs Remittance of Current Income – Like dividend, pension, rent etc is permitted subject to CA certificate regarding payment of Taxes. Remittance of Sale Proceeds of Assets - Permitted up to USD1.0 Mio per F.Y. (property acquired out of Rupee funds as resident) subject to tax clearance/NOC from Income Tax authority. Ashit Hegde

13. Inherited Property – Inheritance  Permitted subject to documentary evidence, CA certificate Settlement /Gift  Under USD 1.0 Mio limit. Property purchased out of Forex – Permitted for two properties. Balance under USD1.0 Mio limit Note: Students going abroad for studies are treated as NRIs. Ashit Hegde

14. Reporting – All remittances abroad (i.e. repatriation) from NRO a/cs have to be reported by email to RBI, Mumbai within 7 days from the end of the month in the prescribed format. Ashit Hegde