Nri Investment Guide

The question how to open an NRI Bank account in India is a frequently asked by many of the Non Residents. It is a question that actually bewilders them a lot. Especially if you have a new person who is about to leave India soon or someone who has been newly offered a job somewhere in the world other than India.

Now the procedure of how to open an NRI Bank account in India remains the same for any resident bank. The only thing you need to do is to make a plan and know more about NRI banking services that are presently on offer in India.

The definition

To define as to who is an NRI or a Non Residential Indian is not that difficult a thing. Any person residing outside India for a long period of time pursuing a business, work or vocation out of the Indian territory for an indefinite period is an NRI.

Now we have PIOs or People of Indian Origin in addition to this and they are also treated as Non Residents of India. However there are certain criteria that define a PIO like:

• People who have had at least one grandparent from India or
• Anyone who has held an Indian passport in the past.

The accounts

There are a few NRI accounts that are discussed below:

• Ordinary Non Resident Accounts are the first to be discussed under this category. These accounts can be opened only after you have got your NRI status. You can also obtain an NRO account by simply walking into a bank. You can get a current, fixed deposit or savings account on offer. You can have joint NRO accounts with a resident Indian. However it is a taxable account and the money can never be remitted into foreign currency.

• Non Resident External Accounts are accounts that are tax free and any NRI can open this account under the RBI guidelines. Foreign currency like US Dollar, Pound and Yen can be parked in this account. But it can be a joint account with an Indian citizen. You can remit the money and if you want to come back to India to settle down then you can change it into a Resident Account.

The operation

Now the question may arise as to how can you operate this newly opened NRI Bank account in India The answer to this question is that you can simply make someone who you trust your caretaker for the account. Now such a person has to be given the Power of Attorney for your account. Then they can start operating on your behalf. You can also choose a mandate. This mandate does not need any such power but can get some facilities on your behalf.

The research

Make sure that you research well on all the possible banks in India before opening an NRI Bank account in India. Remember that it is your money and you have the right to get all the information. Compare and check all the services provided by the banks. Definitely go through the FAQs present on the websites. You can take time shop around and think twice before you take a call.

So now that you know all about NRI banking you can go ahead and get a suitable account in any of the Indian banks of your choice. However make sure that you know everything about the bank and it should have a brand value. Just go for any other bank as you are not there residing in the Indian territory any more. You would not like to harass your near and dear ones. You want to open an NRI Bank account in India as you want to give the best to your loved ones.

NRI Bank Accounts:

In accordance with the NRI banking laws in place for NRI, banks and other fiscal institutions that are permitted by the RBI to deal with NRI (and FOREX), NRI can open either of the three accounts – FCNR (Foreign Currency Non-Resident account); NRE (Non-Resident External rupee account); and/or NRO (Non-Resident Ordinary rupee account).

Features of such internet banking accounts in India:

• FCNR accounts -
  1. Available only for FDs with the maturity period ranging from 1-3 years

• NRE accounts -
  1. Opened in Indian rupees
  2. FOREX deposits received are first converted to Indian rupees and then credited

• NRO accounts -
  1. Held by any person designated as NRI

Certain knowable facts of the aforementioned accounts:

• Power of Attorney – person having a power of attorney cannot open any account on behalf of NRI though such a person is permitted to run the same. The power of attorney holder cannot make gifts from these accounts nor can he remit outside India.
• Investments – NRI can invest in shares and/or securities of Indian companies, Government, using a NRO or NRE account. Please note that investments made through NRO accounts are non-repatriable while those made through NRE accounts are repatriable.