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.
