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 No.5 dated May 3, 2000 as a citizen of any country other than Bangladesh or Pakistan, if (a) he at any time held Indian passport; or (b) he or either of his parents or any of his grandparents was a citizen of India by virtue of Constitution of India or the Citizenship Act, 1955 (57 of 1955); or (c) the person is a spouse of an Indian citizen or a person referred to in sub-clause (a) or (b).

Eligibility

1. Any person resident outside India (as per Regulation 2 of FEMA), may open NRO account with an authorized dealer or an authorized bank for the purpose of putting through bona fide transactions denominated in Rupees, not involving any violation of the provisions of FEMA, rules, Regulations made thereunder.
2. Opening of NRO accounts by individuals/entities of Pakistan nationality/ ownership require prior approval of Reserve Bank.
3. Opening of NRO accounts by entities incorporated in Bangladesh require prior approval of Reserve Bank.
4. Authorized Dealers are permitted to open NRO accounts of individuals of Bangladeshi nationality without permission of Reserve Bank of India subject to the following conditions:
1. The bank concerned should satisfy itself that the individual is holding valid visa and valid residential permit issued by Foreigner Registration Office (FRO)/ Foreigner Regional Registration Officer (FRRO) concerned:
2. The Authorized bank should put in place a system of quarterly reporting whereby each branch of the Authorized bank shall maintain a record of the bank accounts opened by individual/s of Bangladesh nationality and details of such account shall be forwarded to their Head Office. The Head Office of the bank shall furnish details of such accounts on quarterly basis to the Under Secretary (Foreigners), Ministry of Home Affairs, NDCC-II Building, Jai Singh Road, New Delhi-110 001. E Mail.
3. The report shall contain details of Name/s of the Individual/s, Date of arrival in India, Passport No. and Place/Country of issue, Residential permit reference and date and place of issue, Name of the FRO/FRRO concerned and the Complete address and contact number of the branch where the bank account is being maintained.

Types of Accounts

NRO accounts may be opened/ maintained in the form of current, savings, recurring or fixed deposit accounts. Rate of interest applicable to these accounts and guidelines for opening, operating and maintenance of such accounts shall be in accordance with directives/ instructions issued by Reserve Bank from time to time.

Joint Accounts with Residents/ Non-Residents

The accounts may be held jointly with residents and/or with non-residents.

Permissible Credits/ Debits

A. Credits

1. Proceeds of remittances from outside India through normal banking channels received in foreign currency which is freely convertible.
2. Any foreign currency which is freely convertible tendered by the account holder during his temporary visit to India. Foreign currency exceeding USD 5,000/- or its equivalent in form of cash should be supported by Currency Declaration Form. Rupee funds should be supported by Encashment Certificate, it they represent funds brought from outside India.
3. Transfers from rupee accounts of non-resident banks.
4. Legitimate dues in India of the account holder. This includes current income like rent, dividend, pension, interest, etc. as also sale proceeds of assets including immovable property acquired out of rupee/ foreign currency funds or by way of legacy/ inheritance.
5. Sale proceeds of assets including immovable property acquired out of rupee/ foreign currency funds or by way of legacy/ inheritance.
6. Resident individual may make a rupee gift to a NRI/PIO who is a close relative of the resident individual [close relative as defined in Section 6 of the Companies Act, 1956] by way of crossed cheque/ electronic transfer. The amount shall be credited to the Non-Resident (Ordinary) Rupee Account (NRO) a/c of the NRI/PIO and credit of such gift amount may be treated as an eligible credit to NRO a/c. The gift amount would be within the overall limit of USD 200,000 per financial year as permitted under the Liberalized Remittance Scheme (LRS) for a resident individual.
7. Resident individual may lend to a NRI/PIO close relative [means relative as defined in Section 6 of the Companies Act, 1956] by way of crossed cheque/ electronic transfer, subject to conditions within the overall limit of USD 200,000 per financial year available for a resident individual. The loan amount should be credited to the (NRO) a/c of the NRI/PIO. Credit of such loan amount may be treated as an eligible credit to NRO a/c..
8. Sale proceeds of gold and silver brought in by Non Resident Indians as cleared by Customs subject to duty.

B. Debits

1. All local payments in rupees including payments for investments in India subject to compliance with the relevant regulations made by the Reserve Bank.
2. Remittance outside India of current income like rent, dividend, pension, interest, etc. in India of the account holder.
3. Remittance up to USD one million per financial year (April-March) for all bona fide purposes, to the satisfaction of the authorized dealer bank.
4. Transfer to NRE account of NRI within the overall listing of USD one million per financial year subject to payment of tax as applicable.