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NRI Deposite
NRE & NRO features in tabular form
Features
In Brief: FEATURES OF VARIOUS DEPOSIT SCHEMES AVAILABLE TO NON-RESIDENT INDIANS (NRIs) AT A GLANCE

Particulars

Foreign Currency (Non-Resident) Account (Banks) Scheme (FCNR(B) Account)

Non-Resident (External)Rupee Account Scheme (NRE Account)

Non-Resident Ordinary Rupee Account Scheme (NRO Account)

Who can open an account

NRIs/PIOs/OCIs (individuals / entities of Bangladesh/ Pakistan Nationality/ownership require prior approval of RBI)

NRIs/PIOs/OCIs (individuals / entities of Bangladesh / Pakistan nationality / ownership require prior approval of RBI)

Any person resident outside India (other than a person resident in Nepal and Bhutan). (individuals / entities of Bangladesh / Pakistan nationality / ownership as well as erstwhile OCBs require prior approval of RBI).

Joint account

In the names of two or more non-resident individuals. With a resident close relative on 'former or survivor basis'.

In the names of two or more non-resident individuals.With a resident close relative on 'former or survivor basis'

In the names of two or more non-resident individuals. With a resident close relative on 'former or survivor basis'.

Nomination

Permitted

Permitted

Permitted

Currency in which account is denominated

Pound Sterling, US Dollar, Jap. Yen, Euro, Canadian Dollar and Australian Dollar.  

Indian Rupees

Indian Rupees

Repatriability

Repatriable

Repatriable

Not repatriable except for the following in the account - 1) Current income 2) Upto USD 1 Million per financial year (April- March), for any bonafide purpose out of the balances in NRO account / sale proceeds of assets in India acquired by way of inheritance / legacy inclusive of assets acquired out of settlement subject to certain conditions.  

Type of Account

Term Deposit only

Savings, Current, Recurring, Fixed Deposit  

Savings, Current, Recurring, Fixed Deposit

Period for fixed deposits

For terms not less than 1 year and not more than 5 years.

Term Deposit-Min 1 yr. Max 10 yrs.

As applicable to resident accounts.    

Rate of Interest :

Banks are free to determine interest rates for FCNR(B) Deposits.

Banks are free to determine interest rates for NRE Term Deposits.

Banks are free to determine interest rates for term deposits.                

Tax on Interest Income

Not Taxable

Not Taxable

 TDS on Interest earned on NRO deposits     to be deducted at 30.90%    If the interest amount paid exceeds     Rs.10 lacs, TDS will be @ 33.99%    However, deduction of TDS is subject to    DTAA with many countries.

Operations by Power of Attorney in favour of a resident by the non-resident account holder  

Operations on the account in terms of Power of Attorney is restricted to withdrawals for permissible local payments or remittance to the account holder himself through normal banking channels.

Loans : a. In India: i) to the Account holder ii) to Third Parties

    Without any monetary ceiling on the loan amount subject to usual margin requirements.

   Without any monetary ceiling on the loan amount subject to usual margin requirements.

    Permitted 
Permitted  

  b. Abroad: i) to the Account holder ii) to Third Parties

Without any monetary ceiling on the loan amount subject to usual margin requirements.
Not permitted 

  Without any monetary ceiling on the loan amount subject to usual margin requirements.

    Not Permitted Not Permitted    

$   Provided no funds are remitted to India and are used only in abroad

c. Foreign Currency Loans in India: i) to the Account holder ii) to Third Parties

  Permitted
  Not Permitted

  Not Permitted Not Permitted

  Not Permitted Not Permitted    

Purpose of Loan: a. In India i) to the Account holder  

i) Personal purposes or for carrying on business activities. * ii) Direct investment in India on non-repatriation basis by way of contribution to the capital of Indian firms / companies iii) Acquisition of flat / house in India for his own residential use. (Please refer to para 9 of Sch. 2 to FEMA 5)

i) Personal purposes or for carrying on business activities. * ii) Direct investment in India on non-repatriation basis by way of contribution to the capital of Indian firms / companies   iii) Acquisition of flat / house in India for his own residential use. (Please refer to para 6(a) of Sch.1 to FEMA 5)

Personal requirement and / or business purpose *

ii) to Third Party

Fund based and / or non-fund based facilities for personal purposes or for carrying on business activities *. (Pl. refer to para 9 of Sch. 2 to FEMA 5).

Fund based and / or non-fund based facilities for personal purposes or for carrying on business activities *. (Please refer to para 6(b) of Sch. 1 to FEMA 5)  

Personal requirement and / or business purpose *

b. Abroad : To the account holder and Third Party

  Fund based and / or non-fund based facilities for bonafide purposes.

  Fund based and / or non-fund based facilities for bonafide purposes.  

  Not permitted.      

* The loans cannot be utilised for the purpose of re-lending or for carrying on agriculture or plantation activities or for investment in real estate business.

Note:

a. When a person resident in India leaves India for Nepal and Bhutan for taking up employment or for carrying on business or vocation or for any other purpose indicating his intention to stay in Nepal and Bhutan for an uncertain period, his existing account will continue as a resident account. Such account should not be designated as Non-resident (Ordinary) Rupee Account (NRO).

b. Banks may open and maintain NRE / FCNR (B) Accounts of persons resident in Nepal and Bhutan who are citizens of India or of Indian origin, provided the funds for opening these accounts are remitted in free foreign exchange, Interest earned in NRE / FCNR (B) accounts can be remitted only in Indian rupees to NRIs and PIO resident in Nepal and Bhutan.

c. In terms of Regulation 4(4) of the Notification No.FEMA.5/2000-RB dated May 3, 2000, Banks may open and maintain Rupee accounts for a person resident in Nepal / Bhutan.

d.   The regulations relating to the various deposit schemes available to Non Resident Indians have been notified vide Notification no. FEMA.5 dated 03rd May, 2000, as amended from time to time. The relevant notification and A P (DIR Series) Circulars are available in RBI website www.rbi.org.in and may please be referred to for full details.

I have been a customer of Union Bank of India, NRI Branch at Mumbai since the last 15 years. It is a matter of great satisfaction to me that UBI managers and staff are the most friendly and they have almost always exceeded our expectations.
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