Facilities available to NRIs for making investment in
A. Bank accounts and deposits
B. Other Investments on repatriation Basis.
C. Other Investments on non-repatriation Basis.
D. Investment in immovable property.
E. Facilities to Returning NRIs/PIO.
A: Bank Accounts
1) Rupee Accounts
a) Ordinary Non-Resident Account (NRO)
b) Non-Resident (External) Rupee Account (NRE)
2) Foreign Currency Accounts
a) Foreign Currency (Non-Resident) Accounts (FCNR)
b) Resident Foreign Currency Accounts (RFC) (for returning Indians)
1. Rupee Accounts:
a) Ordinary Non-Resident Account (NRO)
· Can be opened by non-resident individuals/entities.
· Can be held as Savings/Current/Term/Recurring deposits.
· Can be opened with foreign currency or alternatively existing rupee account, if any, can be converted as NRO account.
· Can be jointly held with resident Indians.
· Can be utilized for local payments and for other investments on non-repatriation basis subject to compliance of Reserve Bank regulations.
· Can be opened with any of our branches.
· Interest rates on savings bank account are as applicable as for domestic savings bank account and for term deposit as applicable for domestic deposit account.
· Funds held in these accounts cannot be repatriated. However, funds representing current income like rent, dividend, pension interest etc, are repatriable based on certification by a Chartered Accountant that the amount proposed to be remitted is eligible for repatriation and that applicable taxes have been paid.
· Interest earned on the deposit is subject to tax as applicable.
· Loan/nomination facilities available.
Repatriation from NRO Balance:
Authorized dealers can allow remittance/s up to USD 1 million per financial year, out of the balance held in NRO accounts subject to payments of applicable taxes. The limit of USD 1 million includes sale proceeds of asses/ the assets in India acquired by him by way of inheritance/legacy, on production of documentary evidence in support of acquisition, inheritance/legacy of assets by the remitter, and an undertaking by the remitter and certificate by a Chartered Accountant in the formats prescribed by the Central Board of Direct Taxes.
b) Non-Resident (External) Rupee Account (NRE):
· Non-Resident Indians are permitted to open the account.
· Can be held as Savings/Current/Term/Recurring deposits.
· Can be opened by remittances from abroad/foreign currency tendered by account holder/foreign cheques deposited/transfer from existing NRE/FCNR accounts.
· Interests on NRE Savings bank account are as applicable as for domestic savings bank account.
· Interest on Term deposit is based on LIBOR (London Inter Bank Offered Rate)
· Term deposit can be opened for a minimum period of 1 year and maximum period of 5 years.
· Balance held in the account is freely repatriable.
· Joint account with other NRIs is permitted.
· Joint account with resident individual is not permitted.
· Interest on NRE account is exempt from tax.
· Can be operated by mandate or Power of Attorney holder to facilitate local payments only.
· Mandate or Power of Attorney holder can repatriate back the funds only to an NRI account holder.
· Loan/nomination facility is available.
· Forward Exchange cover facility is available to guard against exchange risk.
2. Foreign Currency Accounts:
a) Foreign Currency (Non-Resident) Account (FCNR)
· Non-Resident Indians are eligible to open the account.
· Can be held in the form of term deposits only.
· Can be maintained in GBP, USD, CAD, AUD, JPY and EURO.
· Can be opened by remittance from abroad or transfer from NRE account.
· Joint Account only with other NRIs is permitted.
· Can be opened for a minimum period of 1 year and maximum period of 5 years.
· Both principal and interest are freely repatriable.
· No tax liability either on the principal or on interest earned.
· Loan/nomination facility available.
· Forward Exchange Cover facility is available to guard against exchange risk.
In respect of FCNR (B) deposits of all maturities contracted effective from the close of business in India as on November 15, 2008, interest shall be paid within the ceiling rate of LIBOR/SWAP rates for the respective currency corresponding maturities Plus 100 basis points (as against LIBOR/SWAP rates plus 25 bps effective from close of business of Oct. 15, 2008).
b) Resident Foreign Currency Account (RFC)
Account can be opened by NRIs on return to
· Can be held as Current and Savings (without cheque book facility) and term deposit.
· Can be opened by transfer from NRE/FCNR account or by remitting foreign currency notes or travelers cheques.
Proceeds of assets held outside
· Pension, rentals and other monetary benefits received from abroad in favour of the account holder can be credited.
Funds in RFC account are free from all restrictions
regarding utilization of foreign currency balances, including any restriction
on investment in any form outside
B: Other Investments on repatriation basis:
· Government dated securities/treasury bills.
· Units of domestic mutual funds under repatriation basis.
Bonds issued by a public sector undertaking (PSU)
Non-convertible debentures of a company
· Shares in Public Sector Enterprises being disinvested by the Government of India, provided the purchase is in accordance with the terms and conditions stipulated in the notice inviting bids.
· Shares and convertible debentures of Indian companies under FDI scheme (Including automatic route & FIPB).
· Shares and convertible debentures of Indian companies through stock exchange under Portfolio Investment Scheme.
Perpetual debt instruments and debt capital
instruments issued by banks in
C: Other Investments on non-repatriation basis:
· Government dated securities (other than bearer securities)/treasury bills.
· Units of domestic mutual funds.
Units of Money Market Mutual Funds in
Non-convertible debentures of a company
The capital of a firm or proprietary concern in
· Deposits with a company registered under the Companies Act, 1956 including NBFC registered with RBI, or a body corporate created under an Act of Parliament or State Legislature, a proprietorship concern or a firm out of rupee funds which do not represent inward remittances or transfer from NRE/FCNR (B) Accounts into the NRO Accounts.
· Commercial Paper issued by an Indian company.
· Shares and convertible debentures of Indian company other than under Portfolio Investment Scheme.
Indian citizen outside
(Note: FEMA 1999 has defined a Person of Indian Origin (PIO) means an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who at any time held Indian passport or who or either of whose father or whose grandfather was a citizen of India by virtue of Constitution of India or the Citizenship Act, 1955(57 of 1955).Spouses who are foreign nationals of non-Indian Origin are not allowed to purchase or sale the immovable property in India).
NRI or PIO can:
any immovable property in
By way of inward remittance from any place outside
· Funds held in any non-resident account maintained in accordance with the provisions of the Act and the regulations made by the Reserve Bank under the Act.
By way of gift from a person resident in
By way of inheritance from a person resident in
2) Transfer any immovable property (for NRIs)
By way of
sale to a person resident in
Other than agricultural or plantation property or
farm house to a person resident outside
3) Transfer any immovable property (for PIO)
Other than agricultural land/farm house/plantation
house, by way of sale to a person resident in
Including residential or commercial property in
4) Sell such property. However, where another foreign citizen of Indian
origin purchases the property, funds towards the purchase consideration should
either be remitted to
5) Repatriate sale proceeds of such property -
· If the property was acquired by the seller in accordance with the provisions of the Exchange Control Rules/Regulations/Law in force at the time of acquisition, or the provisions of FEMA.
· The amount to be repatriated does not exceed (a) the amount paid for acquisition of the immovable property in foreign exchange received through normal banking channels or out of funds held in foreign currency non-resident account or (b) the foreign currency equivalent, as on the date of payment, of the amount paid where such payment was made from the funds held in non-resident external account for acquisition of the property
· In case of residential property, the repatriation of sale proceeds is restricted to not more than two such properties.
E: Facilities to Returning NRIs/PIO.
ü 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 resident outside India.
ü May open, hold and
maintain with an Authorized Dealer in
Forex Facilities for Residents (Individuals)
Authorized dealers can release foreign exchange up to USD 25,000 for a business trip to any
country other than
In connection with private visits abroad, viz., for
tourisum purposes, etc., foreign exchange up to USD 10,000 in any financial year
may be obtained from an authorized dealer on a self declaration basis. The
ceiling of USD 10,000 is applicable in aggregate and foreign exchange may be
obtained for one or more than one visit provided the aggregate foreign exchange
availed of in one financial year does not exceed the prescribed ceiling of USD
10,000. This limit of USD 10,000 per financial year can be availed of by a
person along with foreign exchange for travel abroad for any purpose, including
for employment or immigration or studies. However, for visit
Authorized dealers may release foreign exchange up to USD 100,000 to resident Indian medical treatment abroad on the basis of self declaration without insisting for any estimate from a hospital/doctor in India/abroad. A person visiting abroad for medical treatment can obtain foreign exchange exceeding the above limit, provided the request is supported by an estimate from a hospital/doctor in India/abroad. This release of foreign exchange of USD 100,000 is to meet the expenses involved in treatment and it is in addition to the amount of USD 25,000 released for maintenance expenses of a patient going abroad for medical treatment or check-up abroad, or for accompanying as attendant to a patient going abroad for medical treatment/check-up.
Authorized dealers may release foreign exchange an
amount of USD 100,000 per academic year or the estimate received from the
institution abroad, whichever is higher. Students going abroad are treated as
Non Resident Indians and are eligible for all the facilities available to NRIs
under FEMA. In additions, they can
receive remittance up to USD 100,000 from close relatives (as defined in
section 6 of Companies Act 1956) from
Authorized dealers may release foreign exchange up to USD 100,000 to a person going abroad for employment on the basis of self declaration.
Person going abroad for emigration can draw foreign
exchange up to USD 100,000 on self declaration basis from an authorized dealer
International Credit Cards (ICC)/Debit Cards:
International Credit Cards/Debit Cards can be made for making personal payments like subscription to foreign journals, internet subscription, etc., and for travel abroad in connection with various purposes. The entitlement of foreign exchange on International Credit Cards is limited by the credit limit fixed by the Banks. International Credit Cards (ICC) can be used for:
Ø Meeting expenses/ making purchases while abroad to the extent of the limit of the card.
Ø Making payments in foreign exchange for purchase of books and other items through internet.
holding a foreign currency account in
Surrender of foreign exchange on return:
On return from a foreign trip, travelers are required to surrender unspent foreign exchange held in the form of foreign currency notes and travellers cheques within 180 days of return. However, in case of foreign exchange upto USD 2,000 in the form of
foreign currency notes or TCs can be retained indefinitely for future use. Amount in excess of USD 2,000 have to be surrendered to a bank within 180 days of return or credited to Resident Foreign Currency (Domestic) Account.
Resident Foreign Currency (Domestic) Account:
A resident individual may open, hold and maintain with an authorized dealer in Indian a foreign currency account, to be known as Resident Foreign Currency (Domestic) Account. The account may be credited with foreign exchange acquired in the form of currency notes, bank notes and traveler cheques during the following occasions:
1) While on a visit to any place outside Indian by way of payment for services not arising from any business in or anything done in India; or
any person not resident in
3) By way
of honorarium or gift while on a visit to any place outside
4) Represents the unspent amount of foreign exchange acquired by him from an authorized person for travel abroad;
5) As gift from a close relative;
6) By way of earning through export of goods/services, or as royalty, honorarium or by any other lawful means;
7) Representing the disinvestment proceeds by the resident account holder on conversion of shares held by him to ADRs/GDRs under the sponsored ADR/GDR Scheme approved by the Foreign Investment Promotion Broad of Government of India;
exchange received by way of proceeds of life insurance policy
claims/maturity/surrender values settled in foreign currency from an insurance
The account shall be maintained in the form of Current Account and shall not bear any interest. There is no ceiling on the balance in the account.
Liberalised Remittance Scheme of USD 200,000 for Resident Individuals.
All resident individuals are eligible to avail of the facility under the scheme. The facility will not be available to corporates, partnership firms, HUF, Trusts, etc. Under this scheme, resident individuals may freely remit upto USD 2,00,000 per financial year (April – March) for any permissible current or capital account transactions or a combination of both.
this facility, resident individuals will be free to acquire and hold immovable
property or shares or any other assets outside
2) It is clarified that the facility under the scheme is in addition to those already available for private travel, gift remittances, donations, studies, medical treatment etc (except gift and donations) will continue to be available on a self declaration basis. However, the facility would be now available on a financial year (April – March) basis.
3) It is clarified that such remittances are allowed under the scheme only in respect of permissible current or capital account transactions. All other transactions which are not permissible under FEMA are not allowed under the scheme.