TaxTMI 
TaxTMI 
TaxTMI 
Master Circular on Non-Resident Ordinary Rupee (NRO) Account
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....ter Circular ============= Document 1 RBI/2009-10/23 Master Circular No.03 /2009- 10 July 1, 2009 To, All Authorised Dealer Category - I banks and Authorised banks Madam / Sir, Master Circular on Non-Resident Ordinary Rupee (NRO) Account The acceptance of deposits by an Authorised Dealer / Authorised bank from persons resident outside India are regulated by the provisions of sub-sections (1) and (2) of section 6 of the Foreign Exchange Management Act, 1999 read with FEMA Notification No.5/2000 RB dated May 3, 2000, as amended from time to time. 2. This Master Circular consolidates the existing instructions on the subject of "Non-Resident Ordinary Rupee (NRO) Account" at one place. The list of underlying circulars/notifications consolidated in this Master Circular is furnished in the Appendix. 3. This Master Circular is being issued with a sunset clause of one year. This circular will stand withdrawn on July 1, 2010 and be replaced by an updated Master Circular on the subject. Yours faithfully, (Salim Gangadharan) Chief General Manager-in-Charge INDEX 1. Definitions3 2. Eligibility3 3. Types of Accounts3 4. Joint Accounts With Residents / Non- Residents4 5. Permissible ....
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....unts may be held jointly with residents and / or with non-residents. 5. Permissible Credits / Debits A. Credits (i) Proceeds of remittances from outside India through normal banking channels received in foreign currency which is freely convertible. (ii) 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 the form of cash should be supported by currency declaration form. Rupee funds should be supported by encashment certificate, if they represent funds brought from outside India. (iii) Transfers from rupee accounts of non-resident banks. (iv) Legitimate dues in India of the account holder. This includes current income like rent, dividend, pension, interest, etc. (v) Sale proceeds of assets including immovable property acquired out of rupee/foreign currency funds or by way of legacy/inheritance. B. Debits (i) All local payments in rupees including payments for investments in India subject to compliance with the relevant regulations made by the Reserve Bank. (ii) Remittance outside India of current income like rent, dividend, pension, interest, etc. in ....
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.... subject to the above limit of USD 1 million, per financial year. 6.4 Restrictions (a) The remittance facility in respect of sale proceeds of immovable property is not available to citizens of Pakistan, Bangladesh, Sri Lanka, China, Afghanistan, Iran, Nepal and Bhutan. (b) The facility of remittance of sale proceeds of other financial assets is not available to citizens of Pakistan, Bangladesh, Nepal and Bhutan. 7. Foreign nationals of non-Indian origin on a visit to India NRO (current/savings) account can be opened by a foreign national of non- Indian origin visiting India, with funds remitted from outside India through banking channel or by sale of foreign exchange brought by him to India. The balance in the NRO account may be converted by the Authorised Dealer bank into foreign currency for payment to the account holder at the time of his departure from India provided the account has been maintained for a period not exceeding six months and the account has not been credited with any local funds, other than interest accrued thereon. In case the account has been maintained for a period more than six months, applications for repatriation of balance will have to be made by the ....
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....status of the borrower In case of a person who had availed of loan or overdraft facilities while resident in India and who subsequently becomes a person resident outside India, the Authorised Dealer / bank may at their discretion and commercial judgement allow continuance of the loan/overdraft facilities. In such cases, payment of interest and repayment of loan may be made by inward remittance or out of legitimate resources in India of the person concerned. 11. Payment of funds to Non-resident / Resident nominee The amount due/payable to non-resident nominee from the NRO account of a deceased account holder shall be credited to NRO account of the nominee with an Authorised dealer / bank in India. The amount payable to resident nominee from the NRO account of a deceased account holder shall be credited to resident account of the nominee with a bank in India. 12. Operation of NRO account by Power of Attorney holder Powers have been delegated to the authorized dealers/banks to allow operations on an NRO account by Power of Attorney granted in favour of a resident by the non-resident individual account holder provided such operations are restricted to: (i) All local payments in Ru....
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....ermitting remittances for various transactions. In terms of the provisions contained in sub-section 5 of Section 10 of the Act, before undertaking any transaction in foreign exchange on behalf of any person, Authorised Dealer is required to obtain a declaration and such other information from the person (applicant) on whose behalf the transaction is being undertaken that will reasonably satisfy him that the transaction is not designed to contravene or evade the provisions of the Act or any of the Rules or Regulations made or Notifications or directions or orders issued under the Act. Authorised Dealer banks should preserve the information / documents obtained by them from the applicant before undertaking the transactions for verification by the Reserve Bank. In case the person on whose behalf the transaction is being undertaken refuses or does not give satisfactory compliance of the requirements of an Authorised Dealer bank, he shall refuse in writing to undertake the transactions. Where an Authorised Dealer bank has reasons to believe that a contravention or evasion of the Act or the Rules or Regulations made or Notifications issued thereunder was contemplated in the transaction....