NRI Joint Holders in Resident Savings Accounts Allowed
Current · Source: Reserve Bank of India · RBI/2011-12/173 · issued 15 Sep 2011 · ~2 min read
Quick answerResident individuals can now add non-resident close relatives as joint holders in their savings bank accounts on a 'former or survivor' basis, but the NRI cannot operate the account during the resident's lifetime.
The rule, in the simplest words
A person living in India can add a close relative (like a brother or sister) who lives outside India as a joint holder in their savings bank account.
The joint account is on 'former or survivor' basis, meaning the relative outside India cannot use the money or do any banking while the person in India is alive.
The relative outside India can only take over the account after the person in India dies.
Banks must tell their customers about this new rule and update their forms and computer systems to make sure the outside-India relative cannot operate the account during the resident's lifetime.
How it plays out — a real example
Priya, a forex & trade-finance officer in Mumbai, is helping a resident customer, Mr. Sharma, open a savings account. Mr. Sharma wants to add his NRI son, who lives in Dubai, as a joint holder. Priya explains that under the new RBI rule, she can add the son as a 'former or survivor' joint holder, but the son cannot use the account or withdraw money while Mr. Sharma is alive. She updates the account form and flags the system to block any transactions from the son's side until Mr. Sharma passes away.
What changed
RBI has permitted resident individuals to include non-resident close relatives (relatives as defined in Section 6 of the Companies Act, 1956) as joint account holders in their resident savings bank accounts. The joint holding is restricted to a 'former or survivor' basis, meaning the NRI cannot operate the account while the resident account holder is alive.
What it means for you
Banks should bring the contents of this circular to the notice of their constituents/customers concerned. This liberalisation simplifies estate planning for NRIs and residents, but banks need to ensure strict adherence to the non-operation condition during the resident's lifetime. It also requires careful KYC and monitoring to prevent misuse.
What you must do
Update internal policies and account opening forms to include non-resident close relatives as joint holders on 'former or survivor' basis.
Train branch staff on the new eligibility and operational restrictions for such joint accounts.
Ensure systems flag that the NRI joint holder cannot operate the account during the resident's lifetime.
Communicate the circular to all customers and relevant constituents.
Who it affects
Authorised Dealer (AD) banks, Resident individuals with NRI close relatives (as defined in Section 6 of the Companies Act, 1956), Non-resident Indians (NRIs) as defined in FEMA Notification No. 5 dated May 3, 2000, who are close relatives of residents
❓ Common questions
Can the NRI joint holder operate the account while the resident is alive?
No, the NRI joint holder is not eligible to operate the account during the lifetime of the resident account holder. The joint holding is only on a 'former or survivor' basis.
Who qualifies as a 'close relative' under this circular?
The circular refers to the definition of 'relative' under Section 6 of the Companies Act, 1956. Banks should verify the relationship as per that definition.
Does this circular apply to all types of resident bank accounts?
The circular specifically mentions 'resident bank accounts' and refers to savings bank accounts. It does not explicitly cover other account types, so banks should apply it only to savings accounts unless further clarified.
📜 Read the original circular — full text as issued by RBI
RBI/2011-12/173
A.P. (DIR Series) Circular No. 12
September 15, 2011
To
All Banks Authorised to Deal in Foreign Exchange
Madam / Sir,
Savings Bank account maintained by residents in India –
Joint holder - liberalisation
Attention of Authorised Dealer (AD) banks is invited to Regulation 2(vi) of FEMA Notification No. 5 dated May 3, 2000 in terms of which Non-Resident Indian (NRI) means a person resident outside India who is a citizen of India or is a person of Indian origin.
2. The Committee to Review the Facilities for Individuals under the Foreign Exchange Management Act, 1999 has recommended in its Report that resident individuals may be permitted to include non-resident close relative(s) (relatives as defined in the Companies Act, 1956) as joint account holder(s) in their resident bank accounts.
3. On a review, it has been decided that individuals resident in India may be permitted to include non-resident close relative(s) (relatives as defined in Section 6 of the Companies Act, 1956) as a joint holder(s) in their resident bank accounts on ‘former or survivor’ basis. However, such non- resident Indian close relatives shall not be eligible to operate the account during the life time of the resident account holder.
4. AD banks may bring the contents of this circular to the notice of their constituents/customers concerned.
5. The directions contained in this circular have been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law.
Yours faithfully,
(Meena Hemchandra)
Chief General Manager In-Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2011-12/173 · issued 15 Sep 2011. The plain-English explanation above is BankPulse’s own independent summary.
Update internal policies and account opening forms to include non-resident close relatives as joint holders on 'former or survivor' basis.
Train branch staff on the new eligibility and operational restrictions for such joint accounts.
💻 IT / Systems
Ensure systems flag that the NRI joint holder cannot operate the account during the resident's lifetime.
📜 Compliance
Communicate the circular to all customers and relevant constituents.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are a Branch Manager at a bank this circular applies to (Authorised Dealer (AD) banks, Resident individuals with NRI close relatives (as defined in Section 6 of the Companies Act, 1956), Non-resident Indians (NRIs) as defined in FEMA Notification No. 5 dated May 3, 2000, who are close relatives of residents), your first concrete step on “NRI Joint Holders in Resident Savings Accounts Allowed” is: “Update internal policies and account opening forms to include non-resident close relatives as joint holders on 'former or survivor' basis.” (RBI issued this 15 Sep 2011).
Action required: Update internal policies and account opening forms to include non-resident close relatives as joint holders on 'former or survivor' basis.
Action required: Train branch staff on the new eligibility and operational restrictions for such joint accounts.
Action required: Ensure systems flag that the NRI joint holder cannot operate the account during the resident's lifetime.
Action required: Communicate the circular to all customers and relevant constituents.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=6705&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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