Banking for Non Resident Indians A Look At The Basic Features Of NRI Accounts

Posted by Rishank Rautela on August 13th, 2019

Life can take one anywhere; from a new city to a country thousands of miles away. Those Indians who settle in foreign countries are regarded as Non Resident Indians or NRIs. Such people, who leave their homeland to explore greener pastures, often need different banking services to manage their finances, if they have assets or are earning income from those assets in India.  As such, they can choose from several different types of NRI banking accounts, with the most popular ones being Non-Resident Rupee External (NRE) Account, Non-Resident Rupee Ordinary (NRO) account and Foreign Currency Non-Repatriable account deposits. Each of these accounts comes with some basic features. Let’s take a look.

Basic features of NRI bank accounts

Here are some of the most basic features of NRI Accounts.

The ability to open and operate joint accounts: In case of both, NRE and NRO accounts, account holders are permitted to hold joint accounts but this is subject to some terms and conditions. Whether it is an NRE or NRE account, you can hold accounts jointly with two or more NRIs. There is also the provision to open joint accounts with Indian residents, but that is possible only in case of NRO accounts and not NRE accounts.

Appointment of power of attorney: NRI bank account holders often find the need to conduct physical transactions (by visiting the bank or otherwise) on their accounts, while they are based abroad. In such a case, they may appoint a power of attorney to conduct those transactions on their behalf. However, individuals appointed as power of attorney holders are provided with limited rights to operate the account.

Facility to name a nominee: Like with all bank accounts, it is also possible to list a nominee(s) when you open an NRI Account in India. There is no restriction on who can be named as the nominee, who may or may not be another NRI. This facility is available across all types of NRI bank accounts which include NRE accounts, NRO accounts and FCNR (B) bank accounts.

You can take out various types of loans: As an NRI bank account holder, you can take out various types of loans, despite being based in a foreign country. For instance, you can take out a home loan, vehicle loan or even a personal loan against your NRI bank account or fixed deposits in India. In most cases, the loan amount is credited into your bank account instantly, with minimal documentation. Moreover, you can avail these loans at nominal interest rates. 

You can avail the overdraft facility: Another general feature of opening an NRI Account in India, is that account holders also have access to overdraft facilities. As such, one can withdraw or use more money than what is parked in their account, up to a prescribed limit as approved by the bank. Overdraft is essentially a line of credit provided on the basis of balances maintained in the account by the account holder. They serve as pre-sanctioned loans which can be taken against assets like fixed deposits, bonds, and shares etc., which serve as collateral.

Auto conversion to regular accounts: When the NRI account holder returns to India, the account is automatically converted into a regular Indian savings account such as Resident Foreign Currency account. In case the deposit has not reached maturity, the account continues to function with previous interest rates.

NRI banking services have made it possible for account holders to access their savings in India from any corner of the world. Moreover, funds can be parked in foreign and Indian currencies and can be easily repatriated.

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Rishank Rautela

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Rishank Rautela
Joined: July 19th, 2019
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