NRI

Foreign nationals of Indian origin who are residing in India for employment of specified duration (irrespective of the length thereof) or for a job or assignment.

The duration of which is not longer than three years are considered as not-permanent resident in India.

And  they are treated at par with foreign nationals for all purposes under exchange control regulations and as such are subject to restrictions placed on foreigners in this regard.

Foreign nationals of Indian origin, permanently resident in India, are treated at par with other resident Indian nationals, and have been granted general exemption from the restrictions placed under foreign exchange regulations.

Provisions applicable to foreign nationals of Indian origin who are resident in India for employment of specified durations (irrespective of the length thereof) or for a specific job or assignment the duration of which does not exceed three years (i.e. who are not permanently resident in India) are discussed in the succeeding paragraphs

Exemptions granted for various purposes

Foreign nationals not permanently resident in India are exempted from the restriction imposed under FERA 1973, in respect of the following:

  • Maintenance of and operations on their foreign currency bank accounts outside India.
  • Making payments to or for the credit of persons resident outside India out of funds held in foreign currency accounts maintained abroad.
  • Holding in India of foreign currency in the form of travelers cheques, currency notes, bank notes and coins.
  • Acquisition, holding or disposal of foreign securities, provided such securities are acquired by them as their own property or are held by them for on behalf of foreign citizens not permanently resident in India.
  • Making of settlement of gift or property outside India.
Maintenance of Bank Accounts in India

 Foreign nationals no permanently resident in India re permitted to open accounts with only authorized dealers in India with specific understanding that it is illegal for them to provide any foreign exchange to other residents through their non-resident associates against reimbursement provided locally. Accounts by authorized dealers in India will be opened after obtaining an undertaking in form QA 22 duly signed by all the persons who are authorized to operate on the account. Besides an undertaking not to provide any foreign currency to any one in India against reimbursement in rupees, the account holder has to specify major sources from which rupee funds to the credit of the account are expected to accrue.
The operations on such accounts will be permitted freely provided credits to the account arise out of sources declared on QA-22 form. The account holder must complete form A4 in respect of any credit into the account which is not directly connected with the source indicated in QA 22 form. These accounts are treated as residents accounts.
When the account holder ceases to be resident in India, the account will be converted to Ordinary Non-Resident Rupee (NRO) account. The operations in the account thereafter will be subject to restrictions as placed on NRO.
Loans to Foreign Nationals not Permanently Resident in India

Banks can grant loans upto a maximum limit of Rs. 100000 to a foreign nationals not permanently resident in India for personal purposes such as purchase of household articles. This limit of Rs. 100000 applies to total borrowing by the foreign national and his dependants from all banks in India. Facility of loan will not be available for investment purposes or for dealing in stocks and shares.
Applications for loans over Rs. 100000 must be submitted to Reserve Bank of India in Form LOV 2 through bank, with whom the account is maintained. The loan application is to be supported with a suitable documentary evidence in support of the purpose of the loan. Loan exceeding Rs. 100000 will be released by the bank only after approval from Reserve Bank of India has been obtained.

Foreign Inward Remittances

There are no restrictions on foreign exchange being brought into India by foreign nationals. The foreign exchange may generally be brought into India in the following two manners:

  • Foreign currency notes/ traveler cheques/ international money order/ personal cheques drawn o foreign banks etc.
  • Remittance through banks in the shape of Demand Draft/ Mail Transfers/ Telegraphic Transfers (TT)/ Travellers letters of credit etc.

Foreign nationals bringing foreign exchange into India must on their arrival declare to customs authorities the particulars of such foreign exchange brought by them on ‘Currency Declaration Form’ (CDF). However, if the aggregate value of foreign exchange brought into India in the form of currency notes, bank/ notes or traveler cheques does not exceed US $ 10000 or its equivalent, and / or the value of foreign currency notes does not exceed US $ 2500 or its equivalent the currency declaration form need not be completed. Customs authorities will certify this declaration and return it to the foreign national. It shall be noted that customs authorities may not permit the foreign nationals to take away any unspent foreign currency notes/ travelers cheques etc. at the time of their departure from India without the production of duly certified Currency Declaration Form. However, unspent foreign currency will be allowed to be taken outside India if total foreign currency brought in was less than US $ 10000 not requiring declaration on from CDF.
Foreign currency traveler cheques/ notes can be freely converted into Indian rupees from banks authorized to deal in foreign exchange and also from authorized money changers. The production of CDF form is however necessary at the time of encashment of foreign currency. The encashing bank will also verify the passport of the foreign national at this stage. Encashment certificate in for ECF must be obtained from the bank/money changer at the time of encashment. Any unspent rupees left with the foreign nationals can be reconverted into foreign currency only against an Enashment Certificate issued by the enashing bank/money changer. The validity of an encashment certificate is only for 3 months from the date of issue.
Restricted money changers also accept foreign currency travelers cheques/notes for payment in respect of purchase of goods from them or hotel bills etc. Notices to this effect are prominently displayed in the premises of such departmental stores / hotels etc.
Banks will freely deal with Demand Draft / Mail Transfer/ Telegraphic Transfers, received by them in favour if foreign nationals and also convert these remittances in Indian rupees at appropriate rates. Banks are required to issue an inward remittance certificate in form BCI at the time of conversion of foreign currency amount of inward remittance to rupees. This certificate will serve the same purpose as an Encashment Certificate for reconverting any unspent rupees to foreign currency. This certificate is also valid for a period of 3 months for reconversion of rupees into foreign currency.

Foreign Outward Remittance

Foreign National on Temporary Visit to India
No foreign outward remittance are permitted to foreign nationals on short visit to India. However, foreign nationals are allowed to take with them at the time of their arrival. Customs certified Currency Declaration Form will have to be produced at the time of departure.
Foreign outward remittance may also be allowed against unspent Indian rupees supported by Encashment Certificate or Inward Remittance Certificate or against foreign currency tendered at the counter. No remittance will, however, be permitted against encashment/ inward remittance certificate which is more than 3 months old.

  • Recurring Remittance Facility
  • Eligibility Foreign nationals who are not permanently resident in India but who are in regular employment with Indian firms/ companies on payment of monthly salary. Such foreign nationals are regular constituents of the bank i.e. must be having their a/c with the bank and hold valid employment visas.
  • Purpose of Remittance: Family maintenance
  • Amount of Remittance: The remittance will be permitted only upto 75% of the net salary of the foreign national.
  • Net salary would mean salary after deduction of contribution to provident fund etc. fund and tax payable
  • Application/ Documents required to be submitted to the Bank.
    (a) Salary certificate showing the computation of net salary.
    (b) Declaration to the effect that remittances made by the person for all purposes during the month including that applied for does not aggregate exceed the prescribed limit and the remittance applied for is being made out of saving from income accrued during that month after retention of adequate funds for his current expenses in India.
  • Retirement Facilities
  • Eligibility: (a) Foreign nationals not permanently resident in India but who at the time of retirement go back to their own country (i) Application in form RFN (ii) Photocopies of Reserve Bank’s letter of approval for the relevant purpose/s (a) Practising a profession or carrying on an occupation, trade or business in India (b) Carrying on activity of trading, commercial or industrial nature (iii) Acting or accepting appointment as agent or management / technical advisor in India (iv) Opening of bank account with an authorized dealer (iii) photocopy of letter of approval issued by Government of Indian for applicant’s appointment in India (iv) Certificate from Indian employer showing monthly income during the past 12 months (v) Income –tax clearance certificate in the prescribed form, in original together with a photocopy (vi) Statements of bank accounts for the past 12 months showing deposit accounts with name and full address of the bankers and suitable documentary evidence in support of each credit of Rs. 1000 or above (vii) Photocopy of Reserve Bank’s letter of approval for acquiring shares/ securities of Indian companies (viii) Photocopy of Reserve Bank’s letter of approval for holding or acquiring immovable property in India. (ix) Available documentary evidence in regard to each type of asset belonging to the applicant and his dependants (x) Documentary evidence indicating sources from which the applicant will derive income, if any, from India after departure from the country such as monthly pension, dividend/ interest on securities etc. and annual income expected from each source.
    General Terms and Conditions of Approval by Reserve Bank of India
  •  These persons will be allowed to transfer their current assets such as sale proceeds of personal effects etc. in full.
  • Repatriation of assets of capital nature in India such as sale proceeds of investment in India shall be restricted to a limit of Rs. 1000000 at the time of retirement. Any excess investment by such person exceeding Rs. 500000 per annum. The entire family of the foreign national shall be considered as a single unit for the above purpose.

However, retiring foreign nationals can obtain foreign exchange upto US $ 2000 or its equivalent from their banks in India pending approval of retirement facilities in terms of the above paragraph. Exchange in the form of foreign notes and coins will not, however, be issued in excess of US $ 500 or its equivalent.
Remittance of Income
These persons will also be entitled to get their current income remitted to the country of their residence without any further reference to Reserve Bank of India. The current income will include interest/ dividend on securities/ shares interest on deposits pension etc.
Remittance of Pension
Standing approval of Reserve Bank is granted for remittance of pension while approving retirement facility and pension, newt after tax, may be remitted by banks to the retired foreign national abroad provided there is no increase in the gross amount of pension payable.
Remittance of Other types of Income
Banks have been permitted to remit amounts representing refunds of income-tax to the persons retiring from India as discussed earlier without any reference to Reserve Bank after verifying the original assessment order and amount retained for payment of tax from the amount originally remitted.
Any other type of remittance will require specific approval from Reserve Bank for which application in form A2 should be made through an authorized dealer in foreign exchange.

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