Banking Awareness : NON-RESIDENT INDIAN (NRI) ACCOUNTS

Definition of NRI 

Foreign Exchange Management Act (FEMA) 1999, defines a Non-Resident Indian as: 

(a) A person resident outside India who is a citizen of India, i.e.

 (i)  Indian citizens who go abroad for employment or for carrying on any business or vacation etc. indicating indefinite period of stay outside India.

 (ii)  Indian citizens working abroad on assignments with Foreign Governments, Government Agencies or International/Multinational Monetary Fund (IMF), and World Bank etc. 

(iii)  Officials of Central and State Governments and Public Sector Undertaking deputed abroad on assignments with Foreign Govt. Agencies/Organization or posted to their own offices including Indian Diplomatic Missions abroad. 

(b) A person of Indian origin who is a citizen of any country other than Bangladesh or Pakistan, if

 (i) He, at any time, held an Indian passport. 

(ii)  He or either of this parents or any of its grand parents were a citizen of India by virtue of Constitution of India or Citizenship Act 1955 (57 of 1955) 

(iii)  The person is a spouse of an Indian Citizen or a person referred in sub clause b (i) or (ii) above.

 Who is a PIO?

A ‘Person of Indian Origin (PIO)’ is a person resident outside India who is a citizen of any country other than Bangladesh or Pakistan or such other country as may be specified by the Central Government, satisfying the following conditions:

1)Who was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955); or

2)Who belonged to a territory that became part of India after the 15th day of August, 1947; or

3)Who is a child or a grandchild or a great grandchild of a citizen of India or of a person referred to in clause (a) or (b); or

4)Who is a spouse of foreign origin of a citizen of India or spouse of foreign origin of a person referred to in clause (a) or (b) or (c)

A PIO will include an ‘Overseas Citizen of India’ cardholder within the meaning of Section 7(A) of the Citizenship Act, 1955. Such an OCI Card holder should also be a person resident outside India.

Types of NRI accounts 

 Different types of non-resident accounts can be opened by banks in India. Their types, important features, requirements and operational aspects are briefly given below: NRI Accounts-Rupee and Foreign Currency Accounts A Non-resident Indian can open following types of accounts: 

1. Non-resident (External) Rupee Account (NRE)

2. Non-resident Ordinary Rupee account (NRO)

3.  Foreign Currency (Non-resident) Account (Banks) [FCNR(B)]