A non-resident Indian (NRI) can access his/her earnings in India through a non-resident ordinary (NRO) account. These earnings in India could be in the form of rent, dividends, interest, pension, among other sources. The account can be opened in the form of a savings, current or fixed deposit account. Repatriation of funds from NRO accounts is permitted by the RBI, subject to certain limits. The procedure for opening an NRO account is as follows.
The NRI can either convert his/her existing resident account in India to an NRO account or open a new NRO account. Documentary proof that the account holder is a non-resident as defined in Indian tax laws is a prerequisite for NRI accounts.
In case of conversion of resident account, a form needs to be filled and signed by all account holders. Documents such as identity proof, NRI status proof, proof of foreign address and two photographs need to be submitted. In case of a new account, the NRI will have to fill up a new account-opening form with similar KYC documents. Proof of residence abroad can be in the form of employment detail, student status, dependent visa status or a copy of resident permit in the overseas destination. This proof needs to be attested by the Indian embassy, notary or branch of an Indian bank with an overseas branch.
Banks also seek proof of financial transactions abroad, be it in the form of cheque drawn on an overseas account or credit card statement that is not over six months old.
Opening of the account
In case of conversion, once documents are received and verified, existing savings account will be redesignated as NRO account. For new accounts, once all the documents are received along with initial amount, the account is opened.
Points to note
1. NRO account can be opened jointly with a resident or non-resident. 2. If the signature on the form varies from the one in the passport, it has to be attested by the manager. 3. Some charges may be levied by the bank for conversion of existing account to NRO. (Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta)