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Investment Facilities
for NRIs/PIOs
If you are a Non-Resident Indian (NRI) or a Person of Indian Origin
(PIO), you can avail of the following facilities without permission
from the Reserve Bank :
Deposits
·
You can open, hold and maintain following types of
accounts with an authorised dealer in India i.e. a bank authorised to
deal in foreign exchange.
Non-Resident (Ordinary) Rupee Account –
NRO Account
Non-Resident (External) Rupee Account –
NRE Account
Foreign Currency Non Resident (Bank)
Account – FCNR (B) Account
·
Salient features of the above accounts are as under :
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Particulars
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FCNR (B)
Account
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NRE Account
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NRO Account
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Joint account of two or more NRIs
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Permitted
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Permitted
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Permitted
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Joint account with another person resident in India
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Not permitted
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Not permitted
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Permitted
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Currency in which account is denominated
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Pound Sterling/ US Dollar/Jap.Yen/Euro
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Indian Rupees
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Indian Rupees
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Repatriability –
Principal
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Freely
repatriable
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Freely
repatriable
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Not
repatriable
(except current income like rent, dividend, pension etc.
and remittances indicated under "Repatriation of NRO
Funds")
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Interest
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Freely repatriable
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Freely repatriable
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Freely repatriable
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Foreign currency risk
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Account holder is protected against changes in INR value
vis-ŕ-vis the currency in which the account is denominated.
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Account holder is exposed to the fluctuations in the value
of INR.
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Account holder is exposed to the fluctuations, in the value
of INR to the extent of interest amount.
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Type of accounts
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Term deposits only.
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Current, Savings, Recurring, Fixed Deposits.
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Current, Savings, Recurring, Fixed Deposits.
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Period of fixed deposits
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For terms not less than 1 year and not exceeding 3 years
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For the periods as announced by the deposit taking bank.
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For the periods as announced by the deposit taking bank.
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Rate of interest
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Banks are free to determine interest rates within the
ceiling, if any, prescribed by the Reserve Bank
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Banks are free to determine interest rates.
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Banks are free to determine interest rates.
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Rupee Loans in India against Security of the funds held in
the account to :
Account holder
Third Party
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Permitted
Permitted
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Permitted
Permitted
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Permitted
Permitted
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Foreign currency loans outside India against security of
the funds held in the account to :
Account holder
Third Party
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Permitted
Permitted
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Permitted
Permitted
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Not permitted
Not permitted
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·
Only account holders can avail of foreign currency loans
in India against the security held in FCNR(B) Deposit Account.
Repatriation of NRO funds
Funds in NRO accounts can be repatriated :
·
Upto USD 30,000 per academic year, to meet expenses in
connection with education.
·
Upto USD 100,000 to meet the medical expenses abroad of
the account holder or his family members.
·
Upto USD 100,000 per year, representing sale proceeds of
immovable property, which was held by you for a period not less
than 10 years subject to payment of applicable Indian taxes.
·
For settlement of credit card charges of International
Credit Cards (ICCs) issued by banks in India to the extent of card
limit.
Remittance of assets
·
You can repatriate an amount not exceeding USD 100,000
per calendar year, out of the assets in India, acquired by way of
inheritance/legacy, subject to Indian taxes, on production of
documentary evidence to establish that the assets have been acquired
by way of inheritance/legacy.
Investment in India :
You can invest in :
·
Government Securities/Units with repatriation rights.
·
Company shares/Debentures with repatriation rights.
·
Shares/debentures of Indian companies through stock
exchange under port-folio investment scheme with repatriation rights.
·
Indian companies without any limit on non-repatriation
basis, freely.
For details please refer to Reserve Bank’s Notifications No.FEMA.20/RB-2000
and No.FEMA.24/RB-2000
dated May 3, 2000 as amended from time to time.
Immovable property
You can acquire –
·
immovable property in India other than
agricultural/plantation property or a farm house, if you are an NRI.
·
immovable property other than agricultural land/farm
house/plantation property in India out of repatriable funds, if you
are a PIO.
You can repatriate –
·
sale proceeds of immovable property acquired in India
out of your repatriable funds, without any lock-in period.
·
refund of application/earnest money/purchase
consideration made by house-building agencies/seller on account of
non-allotment of flats/plots/cancellation of booking/deals for
purchase of residential/commercial properties, togetherwith interest,
net of taxes, provided original payment is made out of NRE/FCNR(B)
account/inward remittances.
N.B. - All persons, whether resident in
India or outside India, who are citizens of Pakistan, Bangladesh, Sri
Lanka, Afghanistan, China, Iran, Nepal, or Bhutan, require prior
permission of Reserve Bank for acquiring or transferring any immovable
property in India.
On return to India
If you decide to return to India :
·
You may continue to hold, own, transfer or invest in
foreign currency, foreign security or any immovable property situated
outside India, if such currency, security or property was acquired,
held or owned when you were resident outside India.
·
You may open, hold and maintain with an authorised
dealer in India a Resident Foreign Currency (RFC) Account to keep your
foreign currency assets. Assets held outside India at the time of
return can be credited to RFC account. The funds in RFC accounts are
free from all restrictions regarding utilisation of foreign currency
balances including any restriction on investment outside India.
N.B. All the above facilities are available under general
permission, i.e., foreign exchange can be availed of from authorised
dealers and does not require Reserve Bank’s approval.
Source: www.rbi.org.in
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