What changed
RBI issued Master Circular No. 3/2010-11 consolidating all existing instructions on Non-Resident Ordinary Rupee (NRO) accounts into a single document. The circular includes a sunset clause, meaning it will be withdrawn on July 1, 2011, and replaced with an updated version.
What it means for you
Banks must now refer to this master circular as the single source for NRO account regulations, replacing earlier scattered circulars. The one-year validity ensures periodic review and updates, so lenders should stay alert for the next version. Key provisions like joint accounts with residents and permissible credits/debits remain unchanged but are now centralized.
What you must do
- Update internal NRO account policies and staff training materials to align with this master circular.
- Ensure all NRO account openings and operations comply with the consolidated instructions, especially for Bangladesh/Pakistan nationals requiring prior RBI approval.
- Monitor the sunset clause and prepare for the updated circular expected by July 1, 2011.
- Verify that foreign currency cash tendered during a temporary visit exceeding USD 5000 is supported by a currency declaration form as per the circular.
Who it affects
All Authorised Dealer Category – I banks, Authorised banks handling NRO accounts, NRI and PIO customers with NRO accounts, Bank compliance and operations teams
What is the sunset clause in this master circular?
The circular has a one-year sunset clause, meaning it will stand withdrawn on July 1, 2011, and be replaced by an updated master circular on NRO accounts.
Can Bangladesh or Pakistan nationals open NRO accounts under this circular?
Yes, but only with prior approval from the Reserve Bank of India, as specified in the eligibility section.
What types of accounts are allowed as NRO accounts?
NRO accounts can be opened as current, savings, recurring, or fixed deposit accounts, with interest rates and operational guidelines as per RBI directives.