Non Resident Ordinary (NRO) Accounts are opened for Non Resident in India. A Non Resident in India (NRI) is an Indian citizen or foreign national of Indian origin resident outside India for purposes of employment, carrying on business or vocation in circumstances as would indicate an intention to stay outside India for an indefinite period. A person of Indian origin (PIO) is a citizen of any country other than Pakistan, Bangladesh or Sri Lanka, who
At any time held an Indian Passport,
He or any of his parents or grand parents was a citizen of India,
Is a spouse of an Indian Citizen or a person referred to above.
When an Indian national or a person of Indian origin residing in India leaves in India for taking up employment, business or vocation or for any other purpose, indicating his intention to stay outside India permanently or for an indefinite period, he becomes a person resident outside India. His bank accounts in India are designated as Non-resident Ordinary (NRO) Accounts. NRO accounts can also be opened with funds remitted from abroad.
Salient features of NRO Accounts
Persons of Indian nationality or origin residing abroad. Accounts can be opened in single name or in joint names with another non resident or Resident in India.
Resident in India by inward remittances from abroad.
In case of NRIs, duly filled in Account Opening form with
Depositing cheques/instruments drawn in foreign currency
Inward remittance in foreign currency or in Indian Rupees from abroad
Transfer from another NRE or FCNR account
Depositors' legitimate income in India.
If credits are received in a foreign currency, the amount is converted into Indian Rupees at prevailing exchange rates.
Amounts can be withdrawn from accounts for making local payments in Indian Rupees.
Balances can be repatriated for any bonafide purpose upto a maximum of US dollar one million per calendar year subject to payment of taxes.
By account holder(s)
Interest rates vary from bank to bank.
Allowed from one branch of the issuing bank to another.
Premature payments attract some interest penalty.
Income Tax at a flat rate of 30% is deducted at source on interest earned irrespective of the amount of interest.
The facility of auto renewal of deposits is available from banks.
Income in India can be credited to NRO accounts.
Rupee loans can be taken in India against the security of the deposit.
Investment in shares/securities/ immovable properties on non repatriation basis can be made with general or specific permission from the RBI.
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