There are many reasons most of the NRI’s want to keep the bond with their mother country. Certainly, investing in India is one of the them. But they have several questions on how to go about it?

Moreover, there is lot of confusion regarding bank accounts & repatriation.

Here, we are trying to cover some of the most frequently asked questions:

What is Non-Resident External (NRE) Account?

NRE bank account is for transferring/ keeping foreign currency which is earned by NRIs. NRI can deposit only foreign currency in NRE accounts.

What is Non-Resident Ordinary (NRO) Account?

NRO account is useful for NRIs who have regular source of income in India. This income includes rents, pensions, dividends etc. Similarly, NRO holders can make local payments/ expenses in India.

The funds which gets credited in the account need to be from India and in Indian rupees only. Repatriation up to USD 1 million per financial year is permissible through this account. 

What is Foreign Currency Non-Resident (FCNR) Fixed Deposit Account?

This account is for NRIs who wish to keep the foreign currency earned by him/her in the same denomination. This deposit account also helps to avoid exchange rate fluctuations (risk). As this account is maintained in foreign currency, the source of funds deposited needs to be from abroad. There is no income tax on the interest earned and the balance amount is freely repatriable.

What documents required to Open NRE/NRO account in India?

• Photocopy of passport.
• Photocopy of Visa.
• Proof of Address of Foreign Residence 
• Other documents

All the copies will have to be attested by Embassy of India or any other overseas banker.

Can NRI’s Invest in Mutual Funds?

NRI’s from all over world can invest in Mutual funds in India. However, USA/ Canada NRIs have limited options of mutual fund companies. This is due to USA/ Canada regulations.

KYC Mandatory for Account opening OR Mutual Funds for NRI?

Yes, NRI investor must complete the KYC (know your client) documentation to open bank account OR to invest in Indian mutual funds. It involves submission of copy and details of documents like an overseas address proof, PAN card, ID proof with few other documents.

Can NRI repatriate Mutual Fund redemption proceeds?

Investments made from NRE or FCNR can be repatriated. Such investments are called Repatriable investments. On the other hand, investments made in mutual funds through NRO account can not be repatriated. In other words, such investments are called non-repatriable investments.

Are NRIs eligible to invest in shares in India?

Yes, NRI’s are allowed to invest directly in stock market through PINS (Portfolio Investment Scheme) account in India. One can open PINS account through an authorized bank branch/broker. But redemption proceeds are granted both on repatriation and non repatriation basis.

Are NRIs allowed to keep deposits with companies in India with repatriation benefits?

Yes. NRI’s are allowed to keep deposits with public limited companies in India. These deposits are for a minimum period of three years and subject to certain ceilings/conditions. Application for the purpose is required to be made by the company receiving the deposits through an authorized dealer.

Are NRI’s eligible to invest in Government Securities?

Yes, NRI’s are entitled to invest their funds in Government Securities through authorized dealers.