Opening NRO Accounts by Foreign Nationals
[Ref: RBI/2010-11/ 560 - A.P. (DIR Series) Circular
No.70 dated June 9, 2011]
Subject: Remittance of assets by foreign nationals- Opening
of NRO Accounts
The
foreign nationals employed in India holding valid visas are eligible to
maintain resident accounts with an Authorised Dealer
Category - I (AD Category-I) bank in India. The AD Category-I banks are
required to close the resident accounts of such foreign nationals on their
leaving the country and transfer their assets to their accounts maintained
abroad. In this connection, attention of the AD Category-I banks is invited to
paragraph 8 of Schedule 3 to the Notification No. FEMA 5 /2000-RB dated 3rd May
2000, viz. Foreign Exchange Management (Deposit) Regulations, 2000, as amended
from time to time, in terms of which when a person resident in India leaves
India for a country (other than Nepal or Bhutan) for taking up employment, or
for carrying on business or vocation outside India or for any other purpose
indicating her / his stay outside India for an uncertain period, her / his
existing account should be designated as a Non-Resident (Ordinary) [NRO]
Account.
2.
The extant instructions have been reviewed so as to facilitate the foreign
nationals to collect their pending dues in India. AD Category-I banks may, therefore, permit such foreign nationals to
re-designate their resident account maintained in India as NRO account on
leaving the country after their employment to enable them to receive their
pending bonafide dues, subject to the following
conditions:
a) AD
Category-I bank should obtain the full details from the account holder about
his legitimate dues expected to be received into his account.
b) AD
Category-I bank has to satisfy itself as regards the credit of amounts which
have to be bonafide dues of the account holder when
she / he was a resident in India.
c) The
funds credited to the NRO account should be repatriated abroad immediately, subject
to the AD Category-I bank satisfying itself regarding the payment of the
applicable Income tax and other taxes in India.
d) The
amount repatriated abroad should not exceed USD one million per financial year.
e) The
debit to the account should be only for the purpose of repatriation to the
account holder’s account maintained abroad.
f) There
should not be any other inflow / credit to this account other than that
mentioned at point (a) above.
g) AD
Category-I bank should put in place proper internal control mechanism to
monitor the credits and debits to this account.
h) The
account should be closed immediately after all the dues have been received and
repatriated as per the declaration made by the account holder mentioned at
paragraph 2 (a) above.
3.
AD Category-I banks may bring the contents of this circular to the notice of
their constituents and customers concerned.
4.
The directions contained in the circular have been issued under sections 10(4)
and 11(1) of the Foreign Exchange Management Act, 1999 (FEMA) (42 of 1999) and
are without prejudice to permissions / approvals, if any, required under any
other law.