If you are looking to manage your income earned in India or remit funds from overseas, opening an NRO (Non-Residential Ordinary) account is an ideal option. An NRO account allows you to maintain and manage your Indian income, such as rent, dividends, or pension, in a designated Indian bank account. In this blog, we will explore who can open an NRO account and the process of NRO account opening in India.
Who can Open NRO Account?
Given below is the list of individuals who can open an NRO account in India:
NRIs
- NRIs are permitted to open an NRO account in India.
- To qualify as an NRI, certain criteria must be met, which are outlined as follows:
- An Indian citizen should reside abroad for a duration of 182 days or more in a single financial year.
- If an Indian citizen has stayed in India for less than 365 days during the previous four assessment years and less than 60 days during the current assessment year.
- Subject to the following conditions, it is possible for NRIs to open a joint account with a Resident Indian (RI) who is a close relative:
- The permitted mode of operation is limited to “Former (NRI) or Survivor” only.
- The NRI will hold the primary account holder position in the joint account, while the RI will be the second applicant.
- Individuals/entities of Pakistan nationality/origin and entities of Bangladesh origin require the prior approval of the Reserve Bank of India.
- NRIs residing in Nepal or Bhutan are not permitted to open NRO accounts.
PIOs
- A PIO (Person of Indian Origin) refers to an individual who resides outside India and holds citizenship in any country except Bangladesh, Pakistan, or any other such country specified by the Central Government. To be classified as a PIO, the person must fulfill the following conditions:
- They were previously an Indian citizen as per the provisions of the Indian Constitution or the Citizenship Act of 1955.
- They originated from a territory that became a part of India after August 15, 1947.
- The individuals are a child, grandchild, or great-grandchild of an Indian citizen or a person mentioned in clause (1) or (2).
- A foreign citizen who is the spouse of an Indian citizen or a foreign citizen who is the spouse of a person mentioned in clause (1), (2), or (3).
- PIOs are allowed to open a joint account with a Resident Indian (RI) who is a close relative:
- The account will be operated on a “Former or Survivor” basis only.
- The PIO will hold the primary or first account holder position in the joint account, while the RI will be the second applicant.
- Before opening an account, individuals who are Pakistani nationals are required to obtain prior approval from the Reserve Bank of India (RBI).
- For Bangladesh nationals, it is necessary to possess a valid visa and residential permit issued by the concerned Foreigner Registration Office (FRO) or Foreigner Regional Registration Office (FRRO).
- PIOs residing in Nepal or Bhutan are not permitted to open NRO accounts.
OCIs
- OCIs (Overseas Citizens of India) are individuals holding foreign citizenship. It provides them with several rights and privileges similar to those enjoyed by Indian citizens and NRIs (Non-Resident Indians), with a few exceptions.
- OCIs are allowed to open a joint account with a Resident Indian (RI) who is a close relative:
- The account will be operated on a “Former or Survivor” basis only.
- The OCI individual will hold the primary or first account holder position in the joint account, while the RI will be the second applicant.
- Pakistani nationals are required to obtain prior approval from the Reserve Bank of India (RBI) before opening the account.
- For Bangladesh nationals, it is necessary to possess a valid visa and residential permit issued by the concerned Foreigner Registration Office (FRO) or Foreigner Regional Registration Office (FRRO).
- OCIs residing in Nepal or Bhutan are not permitted to open NRO accounts.
Foreign Nationals on Employment in India
- Foreign nationals who come to India for employment purposes are not allowed to open an NRO account in India.
- However, they have the option to convert their domestic accounts into NRO (Non-Residential Ordinary) accounts. This conversion allows them to receive their legitimate dues, provided specific conditions are met.
- However, it is important to note that the continuation of the NRO account beyond six months will require approval from the Reserve Bank of India (RBI).
Students who go Abroad for Education
Under the Foreign Exchange Management Act (FEMA), students who go abroad for the purpose of studying are treated as NRIs. Therefore, like NRIs, they are allowed to open an NRO account in India.
Seafarers
Seafarers of Indian nationality or origin who are employed by foreign shipping companies are eligible to open an NRO (Non-Residential Ordinary) account in India.
Foreign Students Studying in India
- Foreign students who are in India for educational purposes are permitted to open an NRO account in India. However, the following conditions apply:
- Within 30 days of opening the account, the foreign student must submit a valid address proof that reflects their local address.
- During this 30-day period, the account can be operated with the following conditions that the foreign remittances into the account should not exceed USD 1,000 and the monthly withdrawals is capped at Rs. 50,000, pending address verification.
- Before opening an account, individuals who are citizens of Pakistan will need to obtain prior approval from the RBI.
- For individuals who are citizens of Bangladesh, it is necessary to possess a valid visa and residential permit issued by the relevant Foreigner Registration Office (FRO) or Foreigner Regional Registration Office (FRRO).
Foreign Tourists on Short Visit to India
- Tourists from abroad who come to visit India can open an NRO account in India subject to following conditions:
- Before opening an NRO account in India, Pakistani Nationals will require a prior approval from RBI.
- Bangladesh Nationals should have a valid visa and residential permit issued by the FRO / FRRO concerned.
- Continuation of the NRO account beyond 6 months will require RBI’s approval.
NRI Account Opening: Open NRO Account Online
Option 1
The process of opening an NRO account may vary among different banks. However, regardless of the chosen bank, the following are the general steps that need to be followed:
- Visit the official website of the desired bank.
- Find the ‘NRI Banking’ section and select the ‘Open NRI account’ option.
- Access the NRI account opening form.
- Select the appropriate account type, which in this case is the NRO account.
- Provide the necessary information in the form, including personal details, employment details, and overseas-related information.
- Upload the required supporting documents.
- Once the application is approved, the bank will request an initial payment to activate the account.
Option 2
To open an NRO account online with SBI NRI you can either click on the button ‘Open NRO Account Online’ in this blog or you can also follow the steps below:
- Download the SBNRI app from the Google Play Store or App Store.
- Sign in using your credentials.
- Click the ‘Open NRI account’ button.
- Utilize the in-app scanning feature to scan and upload your KYC documents.
- Click on ‘Apply’ to complete the process.
NRE and NRO Account RBI Guidelines
According to the RBI guidelines, NRIs cannot continue using a resident savings account. As soon as a resident acquires an NRI status, he/she can no longer use a resident account. NRIs will need to open an NRI bank account in order to conduct financial transactions in India. In accordance with Section 13 of the FEMA, individuals who continue using their residents savings account will face penalties amounting to three times the value of the involved amount, or Rs. 2 lakh (if the exact amount cannot be determined). Additionally, the account holder will be responsible for a daily penalty of Rs. 5,000 from the initial day of violation until the penalty is settled.
Contact SBNRI
Due to lots of information and documentation required to apply for NRO accounts, NRO account opening process is lengthy and cumbersome elsewhere. You can download SBNRI App to apply for an NRO account with nominal documentation in just 10 minutes.
You can also click on the button below to apply for an NRO account. Visit our blog and YouTube Channel for more details.
