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NRI Banking

Banks holding authorized dealers' licenses (i.e. Banks authorized to deal in foreign exchange or banks specifically authorized in this behalf by Reserve Bank can only maintain accounts in the names of NRIs. Certain Co- operative/commercial banks (referred to as authorized banks) have been specifically permitted to maintain accounts of NRIs expressed in rupees even though they are not authorized dealers.

Accounts can be maintained by†NRIs†in rupees as well as in foreign currency. Accounts in foreign currencies can, however, are maintained with authorized dealers only.

Rupee Accounts: - NRO and NRE accounts†can be maintained in current/savings/ fixed deposit form while NRNR accounts can be only in fixed term deposits.

Three types of rupee accounts Viz. Non-resident (External) Rupee Accounts (NRE account), Ordinary Non- resident Rupee Account (NRO accounts ) and Non-resident (Non-repatriable) Rupee Deposit accounts (NRNR) are permitted to be maintained.

Balances held in NRE accounts can be repatriated abroad freely, whereas funds in NRO account cannot be remitted abroad but used only for local payments in rupees. Consequently, funds remitted from abroad or local funds which can otherwise be remitted abroad to the account holder can only be credited to NRE accounts. Funds which do not qualify, under the Exchange Control regulations, for remittance outside India are required to be credited to NRO accounts.

Foreign Currency Accounts: - Accounts in foreign currencies (FCNR accounts) can also be maintained by NRIs with authorized dealers in India. FCNR Accounts permitted to be maintained in Pound Sterling, U.S. Dollar, Deutsche Mark and Japanese Yen. Authorised dealers maintaining these accounts would allow repatriation abroad of these funds.

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