• Accounts can be opened with banks authorised to deal in foreign exchange (authorised dealers). A few other banks have also been permitted to open rupee accounts and Foreign currency accounts.
• Two types of accounts can be opened - Rupee Accounts and Foreign Currency Accounts

Ordinary Non-Resident Rupee (NRO) Accounts: Remittances received from abroad as well as all legitimate dues to the accountholder can be credited to this account. Debits for local payments are freely allowed but remittances abroad are not allowed.

Non-Resident (External) Rupee (NRE) Accounts: Funds remitted from abroad and local funds of a repatriable nature due to the accountholder can be credited. Repatriation of balances abroad is freely allowed.

These are term deposits in foreign currency. Designated  currencies viz.,  Pound Sterling, U.S. Dollar, Euro, Australian Dollar and Canadian Dollar can be kept for a fixed period of 1 year  to 5 years out of funds remitted from abroad. Interest rates are fixed by banks as per regulations of Reserve Bank,  depending upon rates prevailing in international markets. The principal amount and accrued interest both can be freely repatriated abroad.

Details of formalities for opening NRI bank accounts, are available with the bank's branches. For prevailing interest rates click here.

Investment in government securities or units of UTI are permitted through authorised dealers or directly from UTI. Sale proceeds/income in case of funds originally remitted from abroad for the investment can be repatriated abroad. NRI Investment in company shares/debentures is permitted on non-repatriation basis, provided the investee company is not engaged in any agricultural/plantation activity or real estate business. A declaration to the RBI giving particulars of NRI investments has to be made by the investee company within 90 days.

NRIs have been granted general permission to purchase shares disinvested by public sector enterprises with repatriation benefits, provided purchase consideration/bid money is remitted from abroad or paid out of funds held in investor's NRE/FCNR accounts and the holding of a single NRI investor does not exceed 1% of the paid up capital of the PSE concerned.

NRIs/Persons of Indian Origin can acquire residential properties (up to two houses) provided purchase consideration is remitted from abroad or paid out of funds held in NRE/FCNR account. Similar permission has also been granted for acquiring commercial property other than agricultural land/farm house/plantation property. A declaration is to be filed with the RBI within 90 days from acquisition in prescribed form. Repatriation of sale proceeds of properties, is allowed up to the amount originally remitted from abroad for acquisition of the property provided.

Remittances upto USD 1 million for any purpose per financial year from balances in NRO account subject to payment of applicable taxes. The limit of USD 1 million per year inclues sale proceeds of immovable properties held by NRIs/PIOs.

General permission has been granted to NRIs by RBI:

1. for sale through stock exchange of shares/debentures of Indian companies held by NRIs on non-repatriation basis.
2. for sale of shares purchased under portfolio investment scheme provided the sale is arranged through stock exchange by the authorised dealer through whom the original shares were purchased.
3. to certain financial institutions providing housing finance, such as, HDFC, LIC Housing Finance, etc., to grant loans to non-resident Indians for acquisition of a flat/house for self-occupation. Authorised dealers can also grant loans for similar purpose.  The quantum of loan, margin money and period of repayment may be at par with those applicable to housing finance provided to resident indians.

While interest earned on FCNR/NRE deposits is exempt from income tax, income on investments in shares/debentures/ company deposits as also capital gains on investments are subject to tax in India.