What changed
This Master Circular consolidates existing instructions on Non-Resident Ordinary Rupee (NRO) Accounts as of January 1, 2008, into a single document. It includes a sunset clause, meaning it will stand withdrawn on July 1, 2008, and be replaced by an updated version.
What it means for you
For banks and authorized dealers, this circular provides a unified reference for NRO account operations, reducing the need to track multiple circulars. It clarifies eligibility, permissible transactions, and compliance requirements under FEMA, ensuring consistent treatment of NRO accounts across institutions.
What you must do
- Review and update internal NRO account policies to align with this Master Circular's provisions.
- Ensure staff are trained on the consolidated rules, especially eligibility and permissible credits/debits.
- Prepare for the sunset clause by planning to adopt the updated Master Circular after July 1, 2008.
- Verify that joint account setups and loan/overdraft facilities comply with the circular's guidelines.
Who it affects
Authorised dealers and authorised banks handling NRO accounts, Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs), Residents opening joint NRO accounts with non-residents, Foreign nationals of non-Indian origin visiting India
Who can open an NRO account under this circular?
Any person resident outside India, as defined in FEMA, can open an NRO account with an authorised dealer or bank for bonafide rupee transactions. However, individuals or entities from Bangladesh or Pakistan need prior RBI approval.
What types of NRO accounts are allowed?
NRO accounts can be opened as current, savings, recurring, or fixed deposit accounts. Interest rates and operational guidelines follow RBI directives issued from time to time.
What happens to the circular after July 1, 2008?
This Master Circular has a sunset clause and will stand withdrawn on July 1, 2008. It will be replaced by an updated Master Circular on the same subject.