All About NRI Banking Services…!!
NRI Banking is a very specialised and niche segment in the Indian Banking Industry. All of the major scheduled commercial banks in India offers NRI Services. Almost all of them have dedicated desks and NRI team to cater to the needs of the Global Indian diaspora,i.e., NRIs, PIOs & OCIs.
NRI Banking services basically consist of three major verticals viz Savings Bank accounts, Term Deposits (popularly known as fixed deposits) & Remittances.
Before we start exploring each of the services in depth, it is always advisable that we first take a look into some of the Key Concepts & Definitions of NRI Banking.
Who is a Non-Resident Indian ?
QUOTE
Section 2 of the Foreign Exchange Management Act, 1999 (FEMA) deals with various definitions. It defines a person resident in India and a person resident outside India. However, it does not define the term non-resident nor it does define the term Non-Resident Indian (NRI).
However, Notification No. 5/2000-RB (dealing with various kinds of Bank Accounts) defines the term Non-Resident Indian (NRI) to mean a person resident outside India who is either a citizen of India or is a person of Indian origin. In short, the definition of the term NRI is contextual and can have slightly different connotations for FEMA/Income Tax/Acquisition of Immovable Property etc.
UNQUOTE
For Banking Purposes :
An Indian passport holder going abroad for an indefinite period for the purpose of study, business or vocation considered to be NRI (Non-Resident Indian).
For Taxation purposes :
An Indian Passport holder staying abroad for more than 182 days in a financial year is considered to be NRI (Non-Resident Indian) for that financial year.
Check out for more details:
https://www.rbi.org.in/scripts/FAQView.aspx?Id=52#FQ1
Who is a Person of Indian Origin (PIO) ?
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For the purposes of availing of the facilities of opening and maintenance of bank accounts and investments in shares/securities in India; Person of Indian Origin means any person:
a) Who at any time, held an Indian passport; or
b) He/she or either of his/her parents or his/her grandparents was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955(57 of 1955) or
c) The person is a spouse of an Indian citizen or a person referred to in clause (a) or (b) above.
UNQUOTE
A Person of Indian Origin (PIO) means a foreign citizen (except a national of Pakistan, Afghanistan Bangladesh, China, Iran, Bhutan, Sri Lanka and Nepal)
who at any time held an Indian passport Or
who or either of their parents/ grandparents/ great grandparents was born and permanently resident in India as defined in Government of India Act, 1935 and other territories that became part of India thereafter provided neither was at any time a citizen of any of the aforesaid countries (as referred above); Or
Who is a spouse of a citizen of India or a PIO
Check out for more details:
https://mha.gov.in/sites/default/files/ForeigD-FAQs-PIO-Crd.pdf
Who is a OCI ?
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The Government of India, on application, may register any person as an Overseas Citizen of India, if the person:
- was a citizen of India on 26 January 1950 or at any time thereafter; or
- belonged to a territory that became part of India after 15 August 1947; or
- was eligible to become a citizen of India on 26 January 1950; or
- is a child or a grandchild or a great-grandchild of such a citizen; or
- is a minor child of such persons mentioned above; or
- is a minor child and whose both parents are citizens of India or one of the parents is a citizen of India; or
- is a spouse of foreign origin of a citizen of India or spouse of foreign origin of an Overseas Citizen of India Cardholder registered under section 7A of the Citizenship Act, 1955 and whose marriage has been registered and subsisted for a continuous period of not less than two years immediately preceding the presentation of the application
No person, who or either of whose parents or grandparents or great grandparents is or had been a citizen of Pakistan or Bangladesh, is eligible for registration as an Overseas Citizen of India.Persons who served as a member of any foreign military are also ineligible to receive an OCI card.
UNQUOTE
A foreign national, who was eligible to become citizen of India on 26.01.1950 or was a citizen of India on or at any time after 26.01.1950 or belonged to a territory that became part of India after 15.08.1947 is eligible for registration as Overseas Citizen of India (OCI). Minor children of such person are also eligible for OCI. However, if the applicant had ever been a citizen of Pakistan or Bangladesh, he/she will not be eligible for OCI.
Check out for more details:
https://ociservices.gov.in/welcome
Who is an RNOR ?
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A person is an RNOR if he meets either of these two conditions: –
He/she has been non-resident in India, that is, an NRI, in nine out of the ten previous years preceding that year, or –
He/she has, during the seven previous years preceding that year, been in India for a period of 729 days or less
Now depending on the date of return, a person can take the benefit of the RNOR status for up to 3 tax years in India. (Note than a tax year in India is a fiscal year, that is, from April to March)
UNQUOTE
It’s a special status given to the returning NRIs. Under this status they can continue enjoying tax exemption on their foreign and repatriable earnings, for example interest on their existing FCNR(B) deposits.
- Any income that is ‘earned’ in India is taxable for you in India.
- Your Income outside of India is not taxable in India.
