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Indian Bank Accounts for Foreigners

Foreign nationals are now attracted to India due to the availability of massive business opportunities and investment leads. This in turn has pushed India to make a system where these foreign nationals can easily deal with money in other countries. This has also helped India to curate more and more investment from the developed countries.

Why do foreigners need to open Bank Accounts?

Few foreign nationals staying in India, either due to work or business purposes, will in the future need to receive or make payment in rupee to run their business. In such cases, it becomes important that these foreign nationals have a bank account in India that can work for them. This article discusses the types of bank accounts foreign nationals can open in India and it further also explains the process to open a bank account of a foreign national. 

Types of Bank Accounts: 

The following are the bank accounts that a foreign national can open in India. 

  1. Foreign Currency (Non – Resident) Account Bank (FCNR (B)).
  2. Non- Resident Ordinarily Account (NRO).
  3. Non – Resident External Rupee Account (NRE).
  4. Special Non-Resident Rupee Account (SNRR).
  5. Non – Resident (Non-Repatriable) Rupee Deposit Accounts (NRNR Accounts)

To learn more about these accounts, let us have a clear discussion on how each account is different and significant in its own way. The below-mentioned table helps us to understand how these accounts usually work: 

Types of Bank Accounts

NRE Account

NRO Account

FCNR (B) Account

In what currency can such an account be opened?

It can only be opened in Indian Rupees.

It can only be opened in Indian Rupees.

It can be opened in any currency which is permitted, which means a foreign currency that is freely convertible.

What kind of Bank Accounts can be opened?

Accounts like saving, recurring, current, fixed deposits can be opened.

Accounts like savings, recurring, current, and fixed deposits can be opened.

Bank accounts, known as Term deposits, can only be opened.

Who is eligible to open a bank account?

Non-Resident Indians (NRIs) and Persons of Indian origin (PIO).

Any person resident outside India for putting through bonafide transactions in rupees.

Non-Resident Indians (NRIs) and Persons of Indian origin (PIO).

Repatriable or Non-Repatriable?

Such accounts are repatriable in nature.

The income currently in such accounts is only repatriable in nature.

IMPORTANT NOTE: Balances in an NRO account of NRIs / PIOs are remittable up to USD 1 million per F.Y (April-March) along with their other eligible assets.

Such accounts are repatriable in nature.

What all are the permissible credits in such account?

  1. Any kind of interest received on the investment.
  2. Any type of inward remittance from outside India.
  3. Interest accruing in the account.
  4. Transfer from other NRE/FCNR(B) accounts.
  5. Any maturity proceeds received from investments (if such investments were made from this account or through inward remittance).
  6. Any current income received under the head of Rent, dividend, pension, etc.

Furthermore, it is important to note that only those credits would be allowed which have not lost their repatriable nature.
  1. Any type of inward remittance from outside India.
  2. Any kind of legitimate dues pending in India
  3. Any transfer from another NRO account.

Furthermore, any type or amount of Rupee gift/ loan made by a resident to either a NRI or a PIO relative within the limits prescribed under the Liberalised Remittance Scheme might be credited to the latter’s NRO account.
  1. Any kind of interest received on the investment.
  2. Any type of inward remittance from outside India.
  3. Interest accruing in the account.
  4. Transfer from other NRO/FCNR(B) accounts.
  5. Any maturity proceeds received from investments (if such investments were made from this account or through inward remittance)

Furthermore, it is important to note that only those credits would be allowed which have not lost their repatriable nature.

What are the permissible debits in such an account?
  1. Any kind of investment made in India.
  2. Remittance outside India.
  3. Any local disbursements.
  4. Transfer to the other NRE/FCNR(B) Accounts.
  1. Any local payment to be made.
  2. Transfer of amount to NRO account.
  3. Remittance of current income abroad.

IMPORTANT NOTE: Funds can be transferred to the NRE account within this USD 1 Million facility.
  1. Any kind of investment made in India.
  2. Remittance outside India.
  3. Any local disbursements.

Transfer to the other NRO/FCNR(B) Accounts.

 

What are the documents required for opening a bank account by a foreign national?

Below mentioned are some of the documents needed for the opening of a bank account by a foreign national. They are: 

  1. Passport Size photograph of the person
  2. Indian address proof of the individual 
  3. Form 60 or a copy of your PAN card 
  4. A valid foreign passport 
  5. Copy of Foreign Registration Office (FRO) permit.
  6. Overseas Address Proof 
  7. A valid Indian Visa. It should be a long term visa which means it should be valid for more than 182 days
  8. Such individuals are also required to obtain a letter from the employer or a letter of the contract. Furthermore, if business visits are included, approval from the Reserve Bank of India is needed too. 

Note:

Repatriation: It is feasible for foreign nationals to repatriate their profit in India to their families abroad. To repatriate, a foreign national is required to fill out the requisite repatriation form with the submission of the present salary slip or income proof with a copy of the person’s passport.

The foreign national is eligible to change the account over to NRO status when he finishes his task in India and returns to his own country. 

Furthermore, two important points to keep in mind are: 

  1. To become eligible to open a non-resident account, one doesn't have to satisfy the standards of having remained in India for over 182 days. 
  2. Foreign nationals who come to India as travelers can open an NRO account that is substantial or valid for up to six months. 

Conclusion 

When foreign nationals conduct business activities in India, it becomes important that they are given the equal opportunity to open bank accounts so that they can easily deal with money. Therefore, foreign nationals are now fully eligible to open certain types of bank accounts to receive or make payments as per the requirement. 

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