Non Resident Ordinary (NRO)
NRO & NRSR accounts can be held jointly with residents. However, NRE accounts cannot be held jointly with residents.
Rate of interest applicable to these accounts shall be in accordance with the directions/instructions
issued by Reserve Bank from time to time.
Balances held in NRE accounts can be repatriated abroad freely, whereas funds in
NRSR and NRO account cannot be remitted abroad but have to be used only for local
payments in rupees. Funds due to the non-resident accountholder which do not qualify,
under the Exchange Control regulations, for remittance outside India are required to
be credited to NRO accounts. The accountholders can freely transfer funds from
NRO/NRE/FCNR accounts to NRSR account but transfer of funds from NRSR account to other
accounts of NRI is not permissible irrespective of the source of funds.
Permissible Credits/Debits to NRO Account
- Credits
-
Proceeds of remittances received in any permitted currency from outside India
through normal banking channels or any permitted currency tendered by the
account-holder during his temporary visit to India or transfers from rupee
accounts of nonresident banks.
-
Legitimate dues in India of the account holder.
-
Debits
-
All local payments in rupees including payments for investments subject
to compliance with the relevant regulations made by the Reserve Bank.
-
Remittance outside India of current income in India of the account
holder net of applicable taxes.
Funds held in NRO accounts which would generally be from local
source cannot be repatriated outside India.
The funds in your NRO/NRE/NRSR account can be utilised for payment
of airfare to/from and other travel related expenses in India.
Airlines/shipping companies and their agents have also been permitted
to accept payments in rupees.
Can you take a loan/overdraft against your NRO/NRE/NRNR account?
Yes, except for the purpose of relending, carrying on
agricultural/plantation activities or for investment in real estate
business. Loans against NRE fixed deposits can, however, be utilised
for investments in India on non-repatriation basis, in certain specified
areas and for acquisition of flats/houses subject to prescribed conditions.
The rate of interest on such loans will be as per the directive issued
by Reserve Bank (Department Banking Operations and Development) from
time to time.
The loans raised against NRE deposits can be repaid out of funds held
in NRO/NRSR accounts but in such cases, the interest would be charged
at commercial rate in force from time to time.
Can a third party in India take loans against the NRO fixed deposit accounts of NRI?
Yes, Loans/overdrafts to resident individuals/firms/companies in India may be granted
against the security of deposits held in NRO accounts, subject to the following terms
and conditions -
-
The loans shall be utilised 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 relending.
-
Regulations relating to margin and rate of interest as stipulated by Reserve
Bank from time to time shall be complied with.
-
The usual norms and considerations as applicable in the case of advances to
trade/industry shall be applicable for such loans/ facilities.
You can designate a nominee on your account.
Funds held in NRO/NRSR accounts will be allowed to be credited to the non-resident
nominee's NRO/NRSR account only and no repatriation is permitted.
Remittances for credit to rupee accounts (i.e. NRE/NRO/NRNR/NRSR accounts) maintained
by NRIs are converted at the market rate.
Click here to find about interest rates
|
