NRI Rupee Accounts |
NRO and NRE accounts can be maintained in
current/savings/ fixed deposit form while NRNR accounts can be only in fixed term
deposits.
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Three types of rupee accounts Viz. Non-resident
(External) Rupee Accounts (NRE account), Ordinary Non- resident Rupee Account (NRO
accounts ) and Non-resident (Non-repatriable) Rupee Deposit accounts (NRNR) are permitted
to be maintained.
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Authorized dealers have been permitted to credit the
proceeds of foreign currency notes/travellers cheques brought by the account holder from
abroad during his visit to India provided they are tendered in person. Where the amount of
foreign currency notes tendered exceeds U.S. $2,500 or its equivalent or the total amount
tendered i.e. currency notes and travellers cheques, are in excess of U.S. $10,000 or its
equivalent, it should have been declared to the Customs on the Currency Declaration Form
(CDF) at the time of the account holder's arrival into India. Further, in the case of
travellers cheques, they should be presented by the account holder himself and discharged
by him in presence of the official of the concerned bank.
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No.
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Yes, but only for local payments to be made on behalf of
the account holder, In cases where the account holder or a bank designated by him has been
granted permission by Reserve Bank to make investment in India, the Power of Attorney
holder (POA) is permitted to operate the account or facilitate such investment. POA
holders cannot, however, make gifts from NRE accounts.
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No.
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Balances held in NRE accounts can be repatriated abroad
freely, whereas funds in NRO account cannot be remitted abroad but used only for local
payments in rupees. Consequently, funds remitted from abroad or local funds which can
otherwise be remitted abroad to the account holder can only be credited to NRE accounts.
Funds which do not qualify, under the Exchange Control regulations, for remittance outside
India are required to be credited to NRO accounts.
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NRO accounts can be held jointly with residents, However,
NRE accounts cannot be held jointly with residents.
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In the case of NRE accounts, the interest rates for
deposits up to one year should not exceed Bank Rate minus 2 percentage points. Interest
rates on term deposits of over one year are determined by the banks themselves. Interest
rates on NRO accounts are fixed as in the case of domestic deposits.
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Yes. Debits for local payments are allowed freely, Funds
representing legitimate dues of the accounts holder of proceeds of remittances received
from abroad through banking channels are permitted to be credited freely.
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Ans.XI
Debits for local payments/investments are allowed freely.
Credits to an account, of funds emanating from a local source would be permissible only if
the funds are of a repatrible nature i.e. eligible to be remitted abroad.
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Ans.XII
Funds held in NRE accounts can be repatriated abroad
freely. Funds held in NRO accounts which would generally be from a local source cannot be
repatriated outside India. Interest earned on funds in NRO accounts during the financial
year 1994-95 and onwards can however, be remitted to the extent permitted by Reserve Bank
(See Answers to Question 59 and 60).
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Ans.XIII
Yes. Banks maintaining the accounts have been authorized
to permit such payments, Airlines/Shipping companies and their agents have also been
permitted to accept payments in rupees from the funds held in NRO/NRE accounts for the
purpose.
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Yes. Authorized dealers may allow such overdrawings up to
Rs. 1,000/- subject to the condition that the overdrawings together with the interest
payable thereon are cleared within a period of two weeks.
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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 utilized for investments in India on
non-repatriation basis, in certain specified areas and for acquisition of flats/houses
subject to prescribed conditions.
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While interest on loans up to Rs. 2 lacs against NRO/NRE
fixed deposit accounts will be charged two percent above the rates paid banks for the
concerned deposits, repayment of loans will have to be made either by adjustment of the
deposits or by fresh remittances from abroad. Banks are free to charge interest on loans
above Rs. 2 lacs.
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The loans raised against NRE deposits can be repaid out
of NRO funds but in such cases, the interest would be charged at commercial rate as in
force from time to time.
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Ans.XVIII
Funds held in NRO account will be allowed to be credited
to the non-resident nominee's NRO account only and no repatriation is permitted.
Repatriation of funds from the deceased person's NRE account will be permitted by
authorized dealers.
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Ans.XX
Yes. Authorized dealers can permit transfer of funds from
the NRE account of one person to the NRE account of another person for bona fide personal
purposes. Transfers by way of gifts are permitted subject to payment of gift tax.
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Ans.XXI
Remittances made for credit to rupee accounts (i.e.
NRE/NRO/NRNR accounts) maintained by NRIs are converted at market rate.
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Ans.XXII
Yes, NRI and other non-residents can maintain NRO rupee
accounts as well as keep deposits with banks in India under NRNR Rupee Deposit Scheme.
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Ans.XXIII
Such an account can be opened with an authorized dealer
in India by remitting funds from abroad in any convertible foreign currency. Under the
NRNR Scheme, deposits designated in rupees can be kept for periods ranging from 6 months
to 3 years. NRIs can also open such accounts by transferring funds from their existing
NRE/FCNR accounts. No penal interest is chargeable for premature withdrawal of NRE/FCNR
deposits for the purpose of making investments in the scheme. if the deposit is to be kept
with the same authorized dealer.
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Ans.XXIV
Banks are free to determine the interest rate under this
Scheme.
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Ans.XXV
The principal amount of the deposit is not eligible for
repatriation . Interest earned upto 30th September 1994 is also not eligible for
repatriation. Interest earned for the period beginning 1st October 1994
is,however,eligible for repatriation.or can be utilized for opening fresh NRE/FCNR
deposits, or can be credited to existing NRE accounts.
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Ans.XXVI
Only the principal amount of deposit could be renewed
under the scheme upto 30th September 1994. However, since interest accrued for the period
from 1st October 1994 is repatriable, the principal amount together with interest accrued
for the period from 1st October 1994 can be renewed under the scheme.
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Ans.XXVII
Yes Authorized dealers are permitted to grant
loans/overdrafts for purposes other than investment.
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Ans.XXVIII
Banks have been advised to redesignate such accounts as
resident accounts on return of the account holder to India.
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Ans.XXIX
No. 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.