Foreign Exchange Management Act (FEMA) defines a Non-Resident as a person who is not resident in India, a person resident outside India who is a citizen of India or is a person of Indian origin.
One can open following accounts :
NRE Saving / Current Account.
NRE Fixed Deposit in Indian Rupees ( NRE Time Deposit ).
Fixed Deposit in Foreign Currency [ FCNR (B) ] in USD, GBP, EURO,CAD and AUD.
NRO Saving / Current Account.
NRO Fixed Deposit in Indian Rupees.
Proceeds of remittances to India in any permitted Currency.
Proceeds of Foreign Currency/Bank Notes tendered by Account Holder during his temporary visit to India.
Transfer from other NRE / FCNR (B) Accounts.
Interest accruing on the funds held in the Account.
Credit of Current Income of NRIs :
Authorized Dealers may credit the current income like Rent, Dividend, Pension, Interest etc of NRIs to their Non- Resident (External) Rupee accounts provided they are satisfied that the credit represents current income of the non-resident account holder and income tax thereon has been deducted/paid/provided for, as the case may be.
Debit in NRE Accounts :
Local disbursements.
Remittances outside India.
Transfer to NRE/FCNR (B)/ NRO Accounts of the Account Holder or any other person eligible to maintain such Account.
Investment in Shares/Securities/Commercial Paper of an Indian company or for the purchase of immovable property in India provided such investment/purchase is covered by the Regulations of the general/special permission granted, by Reserve Bank of India.
Any other transaction if covered under general or special permission granted by the Reserve Bank of India.
Non-Resident Ordinary Accounts : NRO
Rupee accounts maintained with banks in India, by Non-Residents as distinct from Non-Resident (External) Accounts and Foreign Currency Non-Resident Accounts, are Non-Resident (Ordinary ) Accounts (NRO). The essential features of this category of accounts are that the funds therein are not repatriable outside India except with the specific approval of Reserve Bank of India and the operations on the accounts are subject to certain restrictions.
Permissible Debit :
All local payments in INR including payments for investments in India subject to compliance with the relevant regulations made by Reserve Bank of India
Remittance outside India of current income like Rent, Dividend, Pension, Interest etc in India of the Account Holder.
Remittance up to USD 1 million per Financial Year (April – March), for all bonafide purpose, to the satisfaction of the Authorized Dealer Bank.
Permissible Credit :
Proceeds of remittances from outside India through normal banking channels received in Foreign Currency, which is freely convertible.
Any Foreign Currency, which is, freely convertible tendered by the account holder during his temporary visit to India. Foreign Currency exceeding USD 5000 or its equivalent in form of cash should be supported by Currency Declaration Form (CDF). Rupee funds should be supported by Enchashment Certificates, if they represent funds brought from outside India.
Transfer from Rupee accounts of Non-Resident Banks.
Legitimate dues in India of the Account Holder. This includes current income like Rent, Dividend, Pension, Interest etc. as also sale proceeds of assets including movable property acquired out of Rupee/Foreign Currency funds or by way of legacy/inheritance.
