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NRO Savings Bank Account

Who Can Open ?

  1. Any person resident outside India (as per Regulation 2 of FEMA), may open NRO account with an authorized dealer or an authorized bank for the purpose of putting through bonafide transactions denominated in Rupees, not involving any violation of the provisions of FEMA rules, Regulations made there under.
  2. Opening of accounts by individuals/entities of Bangladesh / Pakistan nationality / ownership requires prior approval of Reserve Bank.

Types of Accounts

NRO accounts may be opened / maintained in the form of current, savings, recurring or term deposit accounts.

Period of Deposit

Term deposits – 15 days to 10 years

Rates of Interest

Rate of interest applicable to these accounts and guidelines for opening, operating and maintenance of such accounts shall be in accordance with directives/instructions issued by Reserve Bank from time to time.

Joint Accounts

The accounts may be held jointly with residents and / or with non-residents provided the first named account holder is an NRI.

Opening of Account and source of credit.

  • On receipt of duly completed Account Opening Form (AOF) along with the documents specified there in.
  • Re-designating existing resident SB account
  • Fresh Remittances by way of TT/MT/DD/IMO/FCTC/FC
  • Transfer from existing NRO/NRE/FCNR(B)
  • Out of legitimate dues of the NRIs in India.
  • Operation allowed through PA Holder for domestic payments


  • Accept.  of FCTC/FC subject to CDF(Beyond Limit)
  • Third Party FCTC will not be accepted.

Permissible Credits

(i) Proceeds of remittances from outside India through normal banking channels received in foreign currency, which is freely convertible.
(ii) 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 form of cash should be supported by Currency Declaration Form. Encashment Certificate should support rupee funds, if they represent funds brought from outside India.
(iii) Transfers from rupee accounts of non-resident banks.
(iv) Legitimate dues in India of the account holder. This includes current income like rent, dividend, pension, interest, etc. as also sale proceeds of assets including immovable property acquired out of rupee/foreign currency funds or by way of gift/ legacy/ inheritance.

Permissible Debits

i) All local payments in rupees including payments for investments in India subject to compliance with the relevant regulations made by the Reserve Bank.
(ii) Remittance outside India of current income like rent, dividend, pension, interest, etc. in India of the account holder.
(iii) Remittance up to USD One million, per financial year (April-March), for all bonafide purposes, to the satisfaction of the authorized dealer bank subject to payment of applicable taxes

Operation of NRO
Account by Power of
Attorney holder

The bank can permit operations on a NRO account by the Power of Attorney holder, provided such operations are restricted to:
  (i) All local payments in rupees including payments for eligible 
      Investments subject to compliance with relevant regulations  
      made by the Reserve Bank; and
 (ii) Remittance outside India of current income in India of the  
      non-resident individual account holder, net of applicable  
The resident PA holder is not permitted to repatriate outside India funds held in the account other than to the non-resident individual account holder nor
To make payment by way of gift to a resident on behalf of the   nonresident account holder or transfer funds from the        account to another NRO account.


Banks have obligation under Sec. 195 of Income Tax Act, 1961to deduct tax at source in respect of interest income of Non Resident Indians. The rate of TDS is specified in the Finance Act, every year. Accordingly, as on date TDS applicability is as under:

  1.              Interest earned up to Rs. 10 lacs           :  TDS @ 30.90%
  2.              Interest earned beyond Rs. 10 lacs        :  TDS @ 33.99%   

                                                          (Inclusive of surcharge.)
However, applicability of TDS is subject to Double Taxation Avoidance Agreement (DTAA) that India has entered with many countries. The lower TDS as per DTAA is allowed on registering the copy of the PAN card with the bank.
Please CLICK HERE for DTAA and TRC details.

Grant of Loans/overdrafts by authorized dealer /     bank to account holders & third parties

(i) Loans to non-resident account holders and to third parties may be granted in Rupees by authorized dealer / bank against the security of fixed deposits subject to the following terms and conditions:
(1)   The loans shall be utilized only for meeting borrower’s personal requirements and/or business purpose and not for carrying on agricultural/plantation activities or real estate business or for re-lending.
(ii)  Regulations relating to margin and rate of interest as  
      stipulated by Reserve Bank from time to time shall be 
      complied with.
(iii) The usual norms and considerations as applicable in the  
      case of advances to trade/industry shall be applicable 
      for such loans/facilities granted to third parties.
(b) Authorized dealer / bank may permit overdraft in the account of the account holder subject to his commercial judgment and in compliance with the interest rate etc. directives.