NRIs are required to adhere to certain banking rules in India to comply with the Foreign Exchange Management Act (FEMA). Such rules control how NRIs hold, use, and conduct transactions in Indian bank accounts while residing overseas.

Major Banking Rules for NRIs

1. Regular Savings Accounts Are Not Allowed

• NRIs are not permitted to hold a regular resident savings account in India.
• Once one becomes an NRI, the current savings account has to be converted to an NRO (Non-Resident Ordinary) account.
• Not converting may attract penalties under FEMA.

2. Types of Bank Accounts for NRIs

• NRE (Non-Resident External) Account – For foreign income, tax-free, fully repatriable.
• NRO (Non-Resident Ordinary) Account – For income received in India, taxable, restricted repatriation.
• FCNR (Foreign Currency Non-Resident) Account – Foreign currency fixed deposit, tax-free, fully repatriable.

Non-Resident Indians (NRIs) can have specially designated bank accounts in India through which their earnings, investments, and dealings are efficiently operated abroad. Such NRI bank accounts are subject to the regulation of the Foreign Exchange Management Act (FEMA) and serve as a facilitative means between the financial system in India and that of the resident country of the NRI. 

Key Points To Know: 

• NRIs are not allowed to have normal savings accounts in India. Holding a normal savings account is illegal under FEMA and can invoke penalties of up to INR 3 lakh or daily penalties.
• NRIs can open and operate these accounts remotely or through Indian bank branches or through the international branches of the bank in foreign nations.
• The documents needed are a valid passport, visa, proof of overseas address, and photographs.
• These accounts are necessary for investment in Indian assets, remittances, and handling Indian income legally.

An FCNR account is a fixed deposit account for Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs) that enables them to keep their earnings in a foreign currency while saving in India. It provides the facility to earn interest without risking currency fluctuations because the deposits are kept in foreign currency.

Features of an FCNR Account

1. Purpose

• Suitable for NRIs and OCIs who wish to save foreign currency and earn interest in India.
• Safeguards savings from exchange rate volatility.

2. Deposit & Withdrawal Rules

• Deposits are accepted only in foreign currencies like USD, GBP, EUR, AUD, CAD, and JPY.
• Funds can be repatriated in full, including the principal and interest.

3. Interest Earnings

• Interest rates on FCNR deposits are greater than international bank deposits.
• The interest is exempt from tax in India and thus is a popular savings option among NRIs.

4. Deposit Tenure

• The FCNR account can be a fixed deposit account with the tenure of 1 to 5 years.
• Premature withdrawal is subject to charges, as per the bank policy.

5. Repatriation of Funds

• Principal and interest can be freely repatriated to any nation without any limit.
• There is no fund transfer limit, which makes it easy for NRIs who deal with money abroad.

6. Joint Account Holding

• May be opened jointly with another NRI or OCI.
• May not be held jointly with a resident Indian.

NRIs may open multiple bank accounts in India to facilitate their financial transactions, investments, and savings effectively. Yet, NRIs are not allowed to hold a normal savings account in India, according to Reserve Bank of India (RBI) policies. Instead, NRIs should keep special accounts like NRE, NRO, and FCNR accounts.

Rules for Multiple NRI Bank Accounts

1. Types of Accounts Permitted

• NRIs are allowed to open and hold multiple accounts like NRE (Non-Resident External), NRO (Non-Resident Ordinary), and FCNR (Foreign Currency Non-Resident) accounts.
• Multiple accounts enable managing income, savings, and foreign transactions in a separate manner.

2. Having Multiple Accounts

• NRIs are allowed to open multiple NRE, NRO, or FCNR accounts with varied banks.
• It is not possible for an individual to have multiple NRE/NRO accounts in one bank under the same category.
• Every account is used for a different reason, i.e., remittance, investments, or management of local income.

3. Legal Compliance

• Maintaining a common savings account as an NRI is against the law as per the rules under Foreign Exchange Management Act (FEMA).
• If an NRI maintains a resident savings account, he/she needs to convert it to an NRO account instantly.
• Not doing so may attract penalties in the form of a fine of up to ₹3 lakh or ₹5,000 per day until corrected.

According to Reserve Bank of India (RBI) rules, Non-Resident Indians (NRIs) are not permitted to maintain a regular resident savings account in India. If anyone turns into an NRI, then they either need to close down their resident savings account or switch it over to an NRO (Non-Resident Ordinary) account. There are, however, certain conditions upon which NRIs are permitted to have a joint account with a resident Indian. 

Rules for NRI Joint Resident Savings Account

1. NRIs Are Not Allowed to Open or Run a Resident Savings Account

• According to FEMA (Foreign Exchange Management Act) guidelines, NRIs are not allowed to hold a normal resident savings account.
• If an NRI still runs such an account, it is deemed illegal, and fines can be levied.

2. Allowed Joint Holding with Resident Indian

• NRIs are allowed to hold a joint NRO account with a resident Indian.
• NRE and FCNR accounts are allowed to be held jointly only with another NRI or OCI.
• The resident joint account holder can open the NRO account for domestic transactions on behalf of the NRI.

3. Limited Access to Resident Savings Account

• Direct transactions are not allowed by an NRI from a joint resident savings account.
• The account should be converted to an NRO account in case the main holder becomes an NRI.
• In certain situations, NRIs can be allowed to act as mandate holders for the savings account of a resident Indian so that they can conduct transactions on behalf of their kin in India.

Non-Resident Indians (NRIs) who want to open a bank account in India have to adopt a procedure laid down by the Reserve Bank of India (RBI) and banking regulations under FEMA (Foreign Exchange Management Act). NRIs can open NRE (Non-Resident External), NRO (Non-Resident Ordinary), and FCNR (Foreign Currency Non-Resident) accounts. These accounts assist in managing foreign earnings made abroad and in India and maintaining compliance with Indian financial regulations.

Steps to Open an NRI Bank Account

1. Select the Appropriate Bank and Account Type

• Choose a bank in India that provides NRE, NRO, or FCNR accounts according to your needs.
• Make a decision about whether you need an individual account or a joint account with someone else who is an NRI.

2. Account Opening Options

• Travel to India: You can go to India and directly visit the bank branch to finish the account opening procedure.
• Through an Overseas Branch: If you have an Indian bank branch in your country, you can walk into the branch to apply for an NRI account.
• Online Application: If the bank does not have a physical branch in your country, you can apply online. The NRI support team of the bank will assist you through the process and with documentation.

3. Fill Out the Application Form

• Get the NRI account opening form either from the website or the branch of the bank.
• Fill in the details like name, passport details, overseas and Indian address, and occupation.

4. Submit the Documents Required

• Valid Passport & Visa (evidence of NRI status).
• Overseas Address Proof (utility bill, driving license, rental agreement).
• Indian Address Proof (if available).
• PAN Card (for taxation in India).
• Passport-sized Photographs.
• Initial Deposit (according to the bank's requirement).

5. Verification Process

• The bank can insist on physical verification or a document attestation by the Indian Embassy, a Notary Public, or the overseas branch of the bank.
• Video KYC verification is permitted by some banks for NRIs.

6. Account Activation and Provision of Banking Necessities

• After approval of the application, account details will be provided by the bank.
• Remit the initial deposit amount through remittance from an overseas account.
• The bank will send the necessary banking documents, such as the passbook, ATM card, checkbook, and internet banking details, to your foreign address directly.

Non-Resident Indians (NRIs) can buy residential property in India by taking home loans from banks and financial institutions governed by the Reserve Bank of India (RBI) under the Foreign Exchange Management Act (FEMA). These home loans enable NRIs to invest in Indian real estate for personal occupation or investment. The majority of banks provide NRI home loans with attractive interest rates, flexible repayment schedules, and extended loan term.

Major Features of NRI Home Loans

1. Eligible Properties

• NRIs can avail loans to purchase residential apartments, villas, independent houses, or under-construction properties.
• They are not eligible to purchase agricultural land, plantation land, or farmhouses using these loans.

2. Loan Tenure & Repayment

• The loan term normally is between 5 to 30 years, depending on the financier.
• Repayment has to be made solely through NRE/NRO accounts by way of EMI (Equated Monthly Installments) in Indian Rupees.
• NRIs are not allowed to make payments in foreign currency or cash.

3. Eligibility Criteria

• The individual should be a citizen of India residing abroad with proper evidence of NRI status (passport, visa, or work permit).
• The minimum age limit is typically 21 years, and the maximum age at the time of loan maturity must not be more than 60-65 years.
• NRIs with regular income sources abroad and a good credit rating have greater possibilities of getting approved.

Detailed information about NRO Bank Account

An NRO (Non-Resident Ordinary) bank account is a type of bank account in India designed for Non-Resident Indians (NRIs) to manage their income earned in India. It is used to deposit income such as rent, dividends, pensions, or any other earnings generated in India. The funds in an NRO account are denominated in Indian Rupees (INR).

Key Features of an NRO Account:

Purpose:

To manage income earned in India (e.g., rent, dividends, interest, etc.).

It is not meant for foreign income or remittances from abroad.

Currency:

The account is maintained in Indian Rupees (INR).

Repatriation:

Funds in an NRO account can be repatriated (sent abroad), but only up to a limit of $1 million per financial year, subject to applicable taxes and documentation.

Joint Account:

An NRO account can be held jointly with another NRI or a resident Indian.

Taxation:

Interest earned on an NRO account is taxable in India as per Indian tax laws.

NRIs may also be subject to Tax Deducted at Source (TDS) on the interest earned.

Types of Accounts:

NRO accounts can be savings, current, fixed deposit, or recurring deposit accounts.

Eligibility:

Only NRIs and Persons of Indian Origin (PIOs) can open an NRO account.

Detailed information about NRE Bank Account

An NRE (Non-Resident External) bank account is a type of bank account in India designed specifically for Non-Resident Indians (NRIs) to park their foreign earnings in Indian Rupees (INR). The primary purpose of an NRE account is to facilitate the repatriation of funds earned abroad back to India. Unlike an NRO account, the funds in an NRE account are fully repatriable, meaning you can transfer the money back to your country of residence without any restrictions.

Key Features of an NRE Account:

Purpose:

To deposit foreign earnings (e.g., salary, business income, or other income earned abroad) in Indian Rupees (INR).

It is not meant for income earned in India (for that, an NRO account is used).

Currency:

The account is maintained in Indian Rupees (INR), but the funds are sourced from foreign currency converted into INR.

Repatriation:

Funds in an NRE account are fully repatriable, meaning you can transfer the money back to your country of residence without any limits.

Tax Benefits:

The interest earned on an NRE account is tax-free in India.

The principal amount and interest are also exempt from wealth tax in India.

Joint Account:

An NRE account can be held jointly with another NRI, but not with a resident Indian.

Types of Accounts:

NRE accounts can be savings, current, fixed deposit, or recurring deposit accounts.

Eligibility:

Only NRIs and Persons of Indian Origin (PIOs) can open an NRE account.