Eligibility

Any person resident outside India may open NRO A/c.

Opening of Account in the name of individuals / entities of Bangladesh / Pakistan nationality / ownership requires RBI approval.

Savings Bank Accounts can also be maintained in Indian Post Offices and can be operated in a manner similar to NRO A/c.

Types of Accounts

Accounts can be:

1. Savings Account ;
2. Current Account;
3. Recurring Deposit (RD) Account; or
4. Fixed Deposit (FD) Account.

Opening of Account

NRO A/c can only be opened and maintained in Indian Rupees (INR).

The account holder should furnish an undertaking at the time of opening of the Account that the credits and debits relating to investments and disinvestments shall be in accordance with RBI regulations.

Permitted Credits

The following are the credits allowed into the Account:

1. Proceeds of remittances to India in any permitted currency;
2. Permitted currency tendered by the account holder during his temporary visit to India;
3. Transfer from rupees accounts;
4. Legitimate dues of the account holder in India;

Permitted Debits

1. Local disbursements in Indian Rupees;
2. Remittances outside India of current income in India net of applicable taxes;

Rate of Interest

Interest payable on NRO A/c will be at the same rates as on resident accounts. These rates vary from time to time as per directions issued by Reserve Bank of India.

The rates of interest offered by various Banks in India differ.

It is beneficial to ascertain the best of the rates offered by various banks before investing with any particular Bank.

Click Here for Interest Rates offered by various Banks and an analysis of the same.

Loans against balances held in the account

1. Loans / Overdrafts are granted to the account holder against security of fixed deposits for:

• Personal purposes or for carrying on business activities.
• Loans cannot be used for:

1. re-lending;
2. carrying on agricultural / plantation activities; or
3. investment in real estate business.

2. Loans / Overdrafts are also granted to third parties resident in India:

Conditions to be fulfilled:

Loans cannot be used for:

1. re-lending;
2. carrying on agricultural / plantation activities; or
3. investment in real estate business.

Change of Residential status

The existing accounts of a person resident in India going abroad and gaining non-resident status are automatically designated as Ordinary Non-Resident Accounts (NRO A/c).

On immigrating to India NRO Accounts can be re-designated as resident rupee accounts.

In case of loans or overdraft facilities availed by a person resident in India, and who subsequently becomes a person resident outside India, payment of interests and repayment of loan may be made by inward remittance or out of legitimate resources in India of the account holder.

Nomination / Cancellation

Funds lying in the NRO Account on the death of an account holder can be credited to the NRO account of his non-resident nominee.

Joint Accounts

Non-Residents can also open joint accounts with residents in India.

Tax Liability

Interest earned on balances in NRO A/c is subject to Indian Income Tax and is deducted at source. Interest earned is repatriable fully from 1996 onwards. The principal amount is entirely non-repatriable.

For any information regarding the Non -Resident Ordinary Rupee Account Scheme (NRO A/c), please visit the FAQ section.