Who is a Non Resident Indian (NRI)?

 Under the Foreign Exchange Management Act, 1999, Non Resident
 Indians are:

 1. Indian citizens who stay abroad for employment or carrying on business or vocation outside India      or for any other purpose in  circumstances indicating an uncertain period of stay abroad; or
 2. Government servants who are posted abroad on duty with the Indian Mission and similar other      agencies set up abroad by the  Government of India where the officials draw their salaries out of      Government resources; or
 3. Government servants deputed abroad on assignments with foreign government or regional /      international agencies like the  World Health Organisation (WHO), Economic and Social Commission      for Asia and the Pacific (ESCAP); or
 4. Official of the State Government and Public Sector Undertakings deputed abroad on temporary      assignments or posted to their  branches or offices abroad.

What kind of Bank Accounts can be operated by NRIs?

 A. Non Resident (Ordinary) Account
 
  Who can open and how?
    An existing bank account of an Indian national going abroad and becoming a non-resident Indian is automatically designated as  Non Resident (Ordinary) Account (NRO). An NRI can also open such ordinary accounts even by making remittances from abroad  or by transfer from an existing non-resident account in India in his own name. Such accounts can be opened by overseas  corporate bodies (OCBs). NRO accounts can be opened while an NRI is on a visit to India or simply by making remittances from  abroad. NRO account can be in the sole name of an NRI or in joint names of more than one NRI or in joint names with any of the  close relatives in India. In other types of joint accounts, prior permission of Reserve Bank of India (RBI) is required.

 What types of accounts can be opened?
    NRO account can be opened in the categories of current, savings, recurring and term deposit accounts.

 What types of transactions are permitted?
    All types of transactions of deposits and withdrawals to and from NRO account are normally permitted. However, the RBI has  prescribed certain transactions, which requires to be reported to RBI in prescribed forms.

 Can these funds be repatriated?
   The funds can be freely withdrawn for the local disbursements without RBI approval. Interest is now repatriable.

 Is interest earned exempt from tax?
   Interest on NRO account is not exempt from Income tax and balances to the credit of NRO account are not exempt from wealth  tax.