Banks holding authorised dealers' licences (i.e. banks authorised to deal in foreign exchange) or banks specifically authorised in this behalf by Reserve Bank can only maintain accounts in the names of NRIs. Certain co-operative/commercial banks (referred to as authorised banks) have been specifically permitted to maintain accounts of NRIs expressed in rupees even though they are not authorised dealers.

Accounts can be maintained by NRIs in rupees as well as in foreign currency. Accounts in foreign currencies can, however, be maintained with authorised dealers only.

Four types of rupee accounts viz.

• Non-resident (External) Rupee Accounts (NRE),
• Non-Resident (Special) Rupee (NRSR) Account,
• Ordinary Non-resident Rupee Accounts (NRO) and
• Non-resident (Non-repatriable) Rupee deposit accounts (NRNR)

are permitted to be maintained by NRIs.

NRO, NRE and NRSR accounts can be maintained in current/savings/fixed deposits form while NRNR account can be only in fixed term deposits.

What if you are returning to India. What happens to your accounts? Banks have been advised to redesignate such accounts as resident accounts on return of the account holder to India. Banks have been advised to continue to pay interest at the contracted rate till the maturity of the deposit if the deposit is held for the full term even after conversion into resident rupee account.

Accounts in foreign currencies (FCNR accounts) can be maintained by NRIs/OCBs with authorised dealers in India. FCNR Accounts can be maintained in Pound Sterling, U.S. Dollar, Deutsche Mark (upto December 2001), Euro and Japanese Yen.

Find out more about NRO, NRE, NRNR and FCNR accounts to see what's best for you.