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TMI BlogMaster Circular on Non-Resident Ordinary Rupee (NRO) AccountX X X X Extracts X X X X X X X X Extracts X X X X ..... ifications consolidated in this Master Circular is furnished in the Appendix. 3. This Master Circular is being issued with a sunset clause of one year. This circular will stand withdrawn on July 1, 2011 and be replaced with an updated Master Circular on the subject. 1. Definitions Non-Resident Indian (NRI) NRI for this purpose is defined in Regulation 2 of FEMA Notification No.5 dated May 3, 2000 . In terms of this Notification, an NRI is a person resident outside India, who is a citizen of India or is a person of Indian origin. Person of Indian Origin (PIO) PIO for this purpose is defined in Regulation 2 of FEMA Notification ibid as a citizen of any country other than Bangladesh or Pakistan, if (a) he at any time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncy, which is freely convertible, tendered by the account holder during his temporary visit to India. Foreign currency exceeding USD 5000 or its equivalent in the form of cash should be supported by currency declaration form. Rupee funds should be supported by encashment certificate, if they represent funds brought from outside India. (iii) Transfers from rupee accounts of non-resident banks. (iv) Legitimate dues in India of the account holder. This includes current income like rent, dividend, pension, interest, etc. (v) Sale proceeds of assets including immovable property acquired out of rupee/foreign currency funds or by way of legacy/inheritance. B. Debits (i) All local payments in rupees including payments for investmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by way of inheritance / legacy, on production of documentary evidence in support of acquisition, inheritance or legacy of assets by the remitter, and an undertaking by the remitter and certificate by a Chartered Accountant in the formats prescribed by the Central Board of Direct Taxes vide their circular No.10/2002 dated October 9, 2002. (b) NRI/PIO may also, within the overall limit of USD 1 million, as stated above, remit sale proceeds of assets acquired under a deed of settlement made by either of his parents or a close relative (as defined in Section 6 of the Companies Act, 1956) and the settlement taking effect on the death of the settler, on production of the original deed of settlement and an undertaking by the remitter and a cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , applications for repatriation of balance will have to be made by the account holder concerned on plain paper to the Regional Office concerned of the Reserve Bank. 8. Grant of loans/overdrafts by the Authorised Bank to account holders and third parties (a) Loans to non-resident account holders and to third parties may be granted in Rupees by Authorized Dealer / bank against the security of fixed deposits subject to the following terms and conditions: (i) The loans shall be utilised only for meeting borrower's personal requirements and/or business purpose and not for carrying on agricultural/plantation activities or real estate business or for re-lending. (ii) Regulations relating to margin and rate of interest, as stipulated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for an uncertain period. Where the account holder is only on a temporary visit to India, the account should continue to be treated as non-resident during such visit. 10. Treatment of loans /overdrafts in the event of change in the resident status of the borrower In case of a person who had availed of loan or overdraft facilities while resident in India and who subsequently becomes a person resident outside India, the Authorised Dealer / bank may at their discretion and commercial judgement allow continuance of the loan/overdraft facilities. In such cases, payment of interest and repayment of loan may be made by inward remittance or out of legitimate resources in India of the person concerned. 11. Payment of funds to Non-resid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cational and other loans availed of by them as residents in India will continue to be available to them as per FEMA Regulations. 14. International Credit Cards Authorised Dealer banks have been permitted to issue International Credit Cards to NRIs/PIO, without prior approval of Reserve Bank. Such transactions may be settled by inward remittance or out of balances held in the cardholder's FCNR (B) / NRE / NRO Accounts. 15. Income-Tax The remittances (net of applicable taxes) will be allowed to be made by the Authorised Dealer banks on production of an undertaking by the remitter and a certificate from a Chartered Accountant in the formats prescribed by the Central Board of Direct Taxes, Ministry of Finance, Government of Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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