NRO Account (Non-Resident Ordinary) Rupee A/c held by NRIs in India

Types of Accounts
NRO accounts can be opened as current, savings, recurring or fixed deposit accounts. The RBI determines the rate of interest on these accounts and issues guidelines for opening, operating and maintaining them.

Joint Accounts with Residents/Non-residents
Joint accounts are permitted with resident and non-residents.

Remittance of Assets –
NRIs and PIO may remit upto USD One million per calendar year,
out of balances held in the NRO account which could be acquired
from the sale proceeds of assets acquired in India out of rupee
or foreign currency funds or by way of inheritance from a resident
Indian, provided:

(a) Assets acquired in India out of rupee/foreign currency
funds
(i) Immovable property: NRIs and PIO may remit sale proceeds of
immovable property purchased by them when they were resident or
out of Rupee funds as NRI or PIO.
(ii) Other financial assets: There is no lock-in period for remittance
of sale proceeds of other financial assets

(b) Assets acquired by way of inheritance: Sale
proceeds of assets acquired through inheritance can be remitted.
No lock-in period applies here if the authorised dealer is satisfied
that the proceeds are from inherited property.

Remittance of assets out of NRO account by a person resident
outside India other than NRI/PIO
A foreign national who is not a citizen of Pakistan, Bangladesh,
Nepal or Bhutan and who

Foreign Nationals of non-Indian origin on a visit to
India
Foreign nationals of non-Indian origin are permitted to open a
NRO account (current/savings) on their visit to India with funds
remitted from outside India through normal banking channels or
by foreign exchange brought to India. The balance in the NRO account
is converted by the bank into foreign currency for payment to
the account holder when he leaves India, provided the account
was maintained for less than six months. The account should not
be credited with any local funds during the term, except for interest
accrued on it.

Grant of Loans/ Overdrafts by Authorised Dealers/ Bank
to Account Holders and Third parties –
Loans to NRI account holders and to third parties is granted in
Indian Rupees by authorised dealers (banks) against the security
of fixed deposits provided:

The authorised dealer/bank may allow an overdraft to the account holder subject to his commercial discretion and compliance with the interest rate directives.

Change of Resident Status of Account holder –
(a) From Resident to Non-resident
When a resident Indian leaves India for taking up employment or
for carrying on business outside India, his existing account is
designated as a Non-Resident (Ordinary) Account, except in the
case of persons shifting to Bhutan and Nepal. For the latter,
the resident accounts do not change to NRO accounts.

(b) From Non-Resident to Resident
NRO accounts may be re-designated as resident rupee accounts once
the account holder returns to India for taking up employment,
or for carrying on business or for any other purpose indicating
his objective to stay in India for an uncertain period. Where
the account holder is only on a temporary visit to India, the
account continues to be treated as non-resident during the visit.

Treatment of Loans/ Overdrafts in the Event of Change
in the Resident Status of the Borrower –
In case of a resident Indian who had availed of loan or overdraft
facilities while resident in India and who subsequently becomes
a NRI, the authorised dealer may at its discretion allow the loan
facility to continue. In this case, payment of interest and repayment
of loan may be made by inward remittance or out of bonafide resources
in India.

Payment of funds to Non-resident/Resident Nominee
The amount payable to a non-resident nominee from the NRO account
of a deceased account holder is credited to the NRO account of
the nominee.

Facilities to a person going abroad for studies –
Students going abroad for studies are treated as Non-Resident
Indians (NRIs) and are eligible for all the facilities enjoyed
by NRIs. All loans availed of by them as residents in India will
continue to be extended as per FEMA regulations.

International Credit Cards
Authorised dealers are allowed to issue International Credit Cards
to NRIs and PIO, without the permission of the RBI. Such transactions
can be made by inward remittance or out of balances held in the
cardholder’s FCNR/NRE/NRO Accounts.

Income Tax
The remittances, after payment of tax are allowed to be made by
the authorised dealers on production of a statement 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 India