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NRI Bank Accounts – Answering The Most Common FAQs

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NRI bank accounts are a part of banking services offered by many Indian banks. These accounts are especially designed for Non-Resident Indians and Persons of Indian Origin, residing in different corners of the world, but with ties in India. For instance, you may need to send funds to a family member in India or be earning income from your assets (properties, investments, pension, etc.) in India. To ensure these funds are managed seamlessly, you need NRI bank accounts. But since there are different types of these accounts, most people are confused about selecting the right account for their requirements. So, we’ve answered some common FAQs about NRI accounts in India.

FAQ 1: Can I open an NRI bank account in any bank in India, irrespective of the country I’m residing in?

Answer: While there is no restriction on the country you are residing in, you cannot open an NRI account in any Indian bank of your choice. The account can be opened only in select banks holding authorised dealers licenses. As such, the bank you open the account in should be authorised by the Reserve Bank of India and it should have the license to deal foreign currencies.

FAQ 2: What are my choices for opening the account?

Answer: You can choose from four major types of NRI bank accounts in India. These include Non-Resident Ordinary Rupee (NRO accounts), Non-Resident External Rupee (NRE accounts), Foreign Currency Non-Resident Bank Deposits (FCNR accounts) and Resident Foreign Currency Accounts (RFC accounts). The type of account you open should depend on your requirements. For instance, if you need to park sums in foreign currencies you need an NRE account whereas if funds are to be parked in Indian currency you need an NRO account. FCNR accounts are basically foreign currency fixed deposit accounts while RFC accounts are ideal for NRIs intending to return to India and park their savings in foreign currencies, to eliminate the risk of currency fluctuations.

FAQ 3: What must I consider before choosing an account?

Answer: Before choosing an account, you must typically consider the type of currency you wish to park in it. Apart from this, you must also consider if you need to send money online, account specifications, balance requirements, facilities offered, benefits and the tax rules that govern each of the above mentioned NRI bank accounts.

FAQ 4: If I am based abroad, can I assign a power of attorney in India to manage my account?

Answer: Yes, you can assign a power of attorney (POA) in India to maintain and operate your account. However, the POA holder has limited powers for account maintenance in that the POA holder can only make payments and investments on your behalf but requires the RBI’s and bank’s permission to the same. The POA holder is not authorised to make cash gifts from your NRI account in India.

FAQ 5: Is it possible to repatriate funds parked in the account while I’m abroad?

Answer: Yes, with NRI banking services, you can freely repatriate your sums parked in the account while you are abroad. While you can freely and fully repatriate both, the principal amount parked and the interest earned in NRE accounts; you can only repatriate the interest component in case of NRO accounts, for accounts opened in 1994-95 and beyond. However, funds may be repatriated as per the limit prescribed by the RBI.

FAQ 6: Can I open a joint NRI bank account?

You may open a joint NRI account with a resident Indian with your NRO account. For NRE accounts, you can open a joint account with another NRI.

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