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Who qualifies as a Non-Resident Indian (NRI)? |
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A person who has gone out of India or who stays outside India for any of the following:
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Taking up employment |
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Business or vocation |
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Any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period |
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Indian citizens working abroad on assignments with foreign Governments/Government agencies or international/regional agencies like the UNO, IMF, World Bank etc. |
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Officials of Central and State governments and Public Sector Undertakings deputed abroad on temporary assignments or posted to a Branch/Office (including diplomatic missions) abroad |
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Indians settled abroad permanently |
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Indians gone abroad on immigration |
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Crew members of Indian nationality or Indian origin employed by foreign airlines/shipping companies, if they are based at foreign ports and reside abroad |
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Non-Resident Indians become Indian residents only when they come back to India for employment or for carrying-on any business in India or vocation or for any other purpose indicating an indefinite period of stay in India.
They are not regarded as Resident Indians during their short visits to India on holiday, leave etc.
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Who is a person of Indian origin? |
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You are a person of Indian origin if have at any time held an Indian passport, or either of your parents or any of your grandparents were citizens of India by virtue of the Constitution of India or the Citizenship Act, 1955 or are the spouse of an Indian citizen or of a person of Indian origin (other than of Pakistan or Bangladesh) and are now a foreign citizen (other than of Pakistan or Bangladesh).
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What is an Overseas Corporate Body (OCB)? |
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Overseas Corporate Bodies are predominantly owned by individuals of Indian nationality or origin, residing outside India, and are inclusive of overseas companies, partnership firms, societies and other corporate bodies which are owned directly or indirectly to the extent of at least 60% by NRIs. OCBs also include overseas trusts in which at least 60% of the beneficial interest is irrevocably held by such persons.
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Are OCBs required to produce any certificate regarding ownership/beneficial interest in them by NRIs? |
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Yes. In order to establish that the ownership interest or beneficial interest in any OCB is held by individuals of Indian nationality / origin, they are required to furnish a certificate from an overseas auditor / chartered account / certified public accountant in a 'Form OAC' where the ownership beneficial interest is held directly by NRIs. The same formalities apply in case the ownership beneficial interest is held indirectly by NRIs. Here they require to submit 'Form OAC 1'.
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What are the various investment opportunities in India available to NRIs? |
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If you are an NRI, the following investment opportunities are open to you:
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Maintenance of bank accounts in India |
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Investment in securities/shares and deposits of Indian firms/companies |
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Investment in immovable property in India |
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Investment in Mutual Funds in India |
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What types of accounts can I open? |
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As an NRI, you can open the following types of accounts:
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Non-Resident External (NRE) |
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Non-Resident Ordinary (NRO) |
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Foreign Currency Non-Resident (FCNR) |
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In what currency can these accounts be maintained? |
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As an NRI, you can open the following types of accounts:
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Non-Resident Ordinary (NRO) |
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Under this scheme you can open Rupee Checking Accounts, namely Rupee Savings Account or Rupee Current Account, and Rupee Fixed Deposit accounts. This account will be maintained in Indian Rupees. Credits to your NRO account are restricted to legitimate dues in India and foreign inward remittances. Only the interest on these accounts is repatriable.Income Tax of 30% is applicable on the Interest Earned. |
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Non-Resident External (NRE) |
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Under this scheme you can open Rupee Checking Accounts, namely Savings Account and Current Account, and Rupee Fixed Deposit accounts. This account will be maintained in Indian Rupees. |
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Foreign Currency Non-Resident (FCNR-B) |
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Under this scheme you can open Fixed Deposit Accounts in USD, GBP & EURO, |
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Can I open these accounts with any Bank in India? |
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No. Only those banks holding an Authorised Dealers' licence or banks specially authorised in this regard by the Reserve Bank of India are permitted to open these accounts on behalf of NRIs.
You can open an account with ING Vysya Bank as we have an Authorised Dealer status.
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Can I open these accounts in any convertible currency? |
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Yes, you can remit funds for opening the account in any convertible currency. However, in the case of NRO / NRE, the remitted funds will be converted into Indian Rupees at the spot exchange rate. These accounts will be maintained in Rupees.
In the case of FCNR accounts, you can remit the funds in any convertible currency. These accounts will be maintained in the currency of your choice i.e. USD, GBP, EURO, JPY, AUD and CAD.
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What is the minimum amount with which I can open an account? |
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NRO - Savings Account
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Rs.5,000/-
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NRO - Current Account
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Rs.10,000/-
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NRO - Term Deposit Account
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Rs.10,000/-
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NRE - Savings Account
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Rs.5,000/-
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NRE - Current Account
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Rs.10,000/-
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NRE - Term Deposit Account
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Rs.10,000/-
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FCNR - Term Deposit Account
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USD 500/- or its equivalent in GBP or Euro
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Can I transfer funds from my existing NRE/FCNR Accounts to open NRO Accounts? |
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Yes, you can.
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If I'm visiting India, can I use Travellers Cheques or Currency to open an account or credit my existing NRE Account? |
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Travellers Cheques can be used to credit/open the account. NRIs bringing Foreign Currency Notes & Travellers Cheques will have to submit a Currency Declaration Form (CDF) to the customs authorities on arrival in India if the foreign currency notes exceed USD 5,000/- or Travellers Cheques and notes exceed USD 10,000/-. You must produce the CDF for endorsement by the bank when you submit the money for opening/credit to an account.
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What is the frequency of Interest payment on my accounts? |
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Half yearly
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NRO - Term Deposit Account
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Quarterly
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NRE - Savings Account
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Half yearly
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NRE - Term Deposit Account
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Quarterly
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FCNR - Term Deposit Account
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Half-yearly
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If you choose the reinvestment scheme, Principal & Interest will be payable on maturity. However, you get the advantage of a higher effective yield on maturity.
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Under which accounts can I avail of a cheque book / ATM card facility? |
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You can avail of a cheque book / ATM Card facility with an NRO - Savings Account & Current Account as well as an NRE - Savings Account & Current Account.
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What are the admissible debits & credits to NRO Accounts? |
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Debits are allowed freely |
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Funds representing legitimate dues of the account holder from local sources and proceeds of remittances received from abroad through normal banking channels are credited freely. |
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What are the permissible debits/credits to the NRE/FCNR Accounts? |
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Debits are allowed freely, however debits for investments in Shares/securities/commercial paper of Indian companies or for purchase or immovable property in India should be covered by general/specific permission of RBI. |
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Credits to an account, through funds from a local source would be permissible only if the funds are repatriable. |
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Also, proceeds of remittances received from abroad in freely convertible currency through normal banking channels may be credited freely |
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Traveler’s Cheques or foreign currency tendered by the account holder during his temporary visit to India. |
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Interest / Maturity Proceeds of Government securities including National Savings Certificates, dividends of Unit Trust of India, provided these securities were purchased out of funds from NRE / FCNR Accounts. |
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Can I give a Power of Attorney to a Resident Indian to operate my Non-Resident Accounts? |
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A Power of Attorney is given only for operating the account & not for opening the account. Further, the operations are restricted only for making legitimate local payments. |
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The Power of Attorney can make payments for the purpose of making investments on behalf of the NRI. |
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Under no circumstance is the Power of Attorney holder allowed to repatriate the funds abroad or make payments or gifts on behalf of the non-resident account holder. |
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Can Power of Attorney Holders credit proceeds of foreign currency notes / bank notes & travellers cheques to the NRE Accounts? |
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No
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What is the exchange risk that I'm exposed to under the different accounts? |
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Since accounts under the NRE scheme are held in Rupees, you will bear the exchange risk if the Rupee depreciates and if you want to make an outward remittance.
In the case of FCNR schemes , this account is maintained in the currency of your choice (USD, GBP, EURO, JPY, AUD & CAD), therefore you will not bear any exchange risk.
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Can I repatriate funds in my NRI Account?
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| NRO |
As per AP Dir Cir number 67 dated 13th Jan 2003, authorised dealers are now permitted to remit upto USD 1 mio out of the legitimate balances held in NRO accounts, sale proceeds of assets , on production of an undertaking and C A certificate by the person making the remittance (in the formats prescribed by RBI). The above facility shall be effective upto June 30th 2003 and is subject to review thereafter. |
Interest earned on investments made on non repatriation basis, after payment of taxes as applicable can be repatriated |
| NRE |
Yes |
Yes |
| FCNR |
Yes |
Yes |
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Can I open a joint account?
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| NRO |
Yes |
Yes |
| NRE |
No |
Yes |
| FCNR |
No |
Yes |
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What taxes may I be liable to pay if I have an NRI Account?
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| NRO |
Yes (Flat 30%) |
No |
| NRE |
No |
No |
| FCNR |
No |
No |
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If I hold any NRI account with a Resident Indian, will the Resident Indian be exposed to tax obligations?
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No. The Resident Indian is not exposed to any tax obligations.
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Can I nominate an Indian Resident or an NRI?
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Yes, you can nominate an NRI or an Indian Resident subject to the following conditions:
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Funds held in the NRO cannot be repatriated by the non-resident nominee & will be credited to the nominee's NRO account. Application from a resident nominee for remittance of funds outside India for meeting the liabilities of any of the deceased Account Holders or for similar purposes should be forwarded to the Rerserve Bank of India. |
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In the case of a resident nominee, the funds held in the NRE/FCNR account can be repatriated subject to prior specific RBI permission. |
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Can I avail of loans against my non-resident deposit accounts?
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Yes. You can avail of loans against your NRO/NRE/FCNR Deposits, the loan/overdraft can be used for personal purposes or for carrying on Business activites other than 1) Relending 2) Agricultural/Plantation activities 3) Real Estate Business.
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Can I transfer funds between NRE Accounts?
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Yes. Transfer of funds from NRE Accounts maintained by two different persons may be allowed for bonafide personal purposes such as personal expenses, education of children, and gifts.
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Can I break my deposit before the maturity period?
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Yes, you can break your deposit before the maturity period. NRE Deposits booked on or after 1st May 2003 will qualify for interest only if they have run for a minimum period of 12 months. NRO Deposits would qualify for interest only if they have run for a period of 15 days, FCNR deposits will qualify for interest only if they have run for a 1 year period.
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Can my deposits with the bank be automatically renewed on maturity?
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If the customer leaves renewal instructions, the deposit will be renewed at maturity in accordance with the instructions. In the absence of any instructions, we will roll over principal & interest for the same period at the rates prevailing on the date of maturity.
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Are there any facilities available for returning Indians?
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Returning Indians can avail of the following facilities:
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Maintenance of assets abroad: An NRI, who has stayed abroad continuously for at least one year, is permitted to maintain his investments in bank deposits, shares, securities, business and immovable properties abroad. |
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Eligibility to open a Resident Foreign Currency Account (RFC): NRIs returning permanently, after a continuous stay of minimum one year abroad, can open Resident Foreign Currency Accounts with banks in India. |
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What is the Resident Foreign Currency Account Scheme?
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This is a scheme permitting persons of Indian nationality or origin who have returned to India for permanent settlement (Returning Indians) after being resident outside India for a continuous period of not less than one year, to open foreign currency accounts against the proceeds held in NRE/FCNR accounts of Funds remitted from abroad.
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What types of accounts can I open under RFC scheme?
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You can open Current, Savings and Fixed Deposit Accounts under the RFC scheme. However you will not be given a cheque book facility, on the RFC Savings/Current Account.
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In which currency can I maintain RFC accounts?
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RFC accounts can be maintained in any permitted currency such as USD, GBP, JPY, EURO etc.
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What is the frequency on interest payment on RFC Savings & Deposit Accounts?
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The frequency of interest payments on RFC Savings & Deposit Accounts is quarterly.
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Is there a nomination facility available for RFC Accounts?
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For Non-Resident nominees, funds can be remitted abroad to the extent of their entitlement if on the date of the account holder's death such nominees are residing outside India. If the nominee is residing in India on the date of death of the account holder, then the equivalent amount will be paid to him in Indian Rupees.
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What funds can be credited to RFC Accounts?
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The entire amount of foreign exchange assets acquired or held while he was resident outside India. This could be in the form of deposits in banks outside India, investments in foreign currency, shares and securities or immovable properties situated outside India or investments in business etc. outside India. It includes foreign exchange earnings through employment, business or vocation outside India commenced by the NRI while he was resident outside India. |
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Also, all balances standing to the credit of their NRE/FCNR Accounts at the time of return can be credited to RFC Accounts. |
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NRIs bringing Foreign Currency Notes & Traveller's Cheques will have to submit a Currency Declaration Form (CDF) to the customs authorities on arrival in India if the foreign currency notes exceed USD 5,000/- or Traveller's Cheques and notes exceed USD 10,000/-. You must produce the Currency Declaration Form for endorsement by the bank when you submit the money for opening/credit to an account. |
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Can income received from my overseas assets in the form of dividends etc, or sale of proceeds of such assets be credited to RFC Accounts? |
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Yes
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Can my pension from abroad be credited to my RFC Account? |
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Yes
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Can funds held in the RFC Accounts be remitted abroad? |
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Funds in RFC Accounts can be remitted abroad for any bonafide purpose of the account holder.
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Can funds in the RFC Accounts be utilised for local payments? |
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Yes. The amount will be converted and credited to the customers resident salary a/c.
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Can NRIs invest their funds in government securities or units of Unit Trust of India? |
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Yes.
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Are NRIs allowed to invest in Public Provident Fund ie PPF, National Saving Certificates(NSCs) and Post Office Savings Bank? |
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No. NRIs are not permitted to invest in PPF, NSCs and Post Office Savings Schemes.
However investments made by a resident (in PPF, NSCs or Post Office Savings scheme),who subsequently becomes NRI may continue to be held upto its maturity on a non-repatriation basis.
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Is permission of Reserve Bank required for NRIs to invest in proprietary/partnership concerns on Non-Repatriation basis? |
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No
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Is permission of Reserve Bank required for making investments in new issues of shares/debentures of Indian companies on Non-Repatriable basis? |
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No
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Can NRIs make investment in non-convertible debentures of Indian companies? |
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Yes
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Can NRIs purchase shares of Indian companies through a private arrangement? |
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Yes. However, the company offering shares for subscription must seek RBI permission to allot shares through a private arrangement to the NRI.
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Can an NRI invest in immovable property? |
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Non-resident Indian citizens can freely purchase and sell residential and commercial properties in India. Foreign citizens need to obtain RBI's permission for the same. However, a foreign citizen of Indian origin need not obtain RBI's permission for purchasing and selling residential and commercial properties (other than agricultural/plantation land and farm houses) for bonafide purposes, provided these purchases are met out of foreign exchange funds.
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Can an NRI import gold or silver? |
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NRIs can bring gold up to 10 kg. And silver upto 100 kg into India once in 6 months, as part of their personal baggage, provided they have stayed abroad for a continuous period of 6 months. The gold may be brought in any form, (except as ornaments studded with stones and pearls). The NRIs will have to pay customs duty in foreign exchange at the rate of Rs.40 per gm of gold and Rs.500 per kg of silver. The gold and silver can be sold to residents, but the sale proceeds will have to be routed through the NRO Account of the seller.
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Can an NRI invest in Mutual Funds? |
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Yes, an NRI can invest in Mutual Funds. However in the case of Money Market Mutual Funds, the investments will be on a non-repatriable basis.
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Do NRIs need RBI permission to invest in Mutual Funds? |
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No , NRIs can invest & redeem units in Mutual Funds without prior permission from RBI. Contact ING Vysya Bank for further details.
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How do I invest in Mutual Funds? |
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You can invest by issuing a cheque against your NRO/NRE Accounts. If you invest from funds in your NRE/FCNR Accounts then you will be able to repatriate income on Mutual Fund earnings abroad.
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Is any prior specific permission required from RBI for investment in Company deposits of Indian Companies? |
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No
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What is the maximum maturity period of these company deposits? |
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Company deposits for NRIs have a maximum maturity of 3 years.
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Can I invest in Company Deposits with repatriation benefits? |
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Yes, you can invest in company deposits with repatriation benefits.
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How do I invest in Company Deposits? |
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The amount can be remitted through normal banking channels or by debiting your exisitng NRE/FCNR Accounts.
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