What changed
Earlier, opening NRO accounts for Bangladesh/Pakistan nationals required RBI approval. Now, for Bangladesh individuals, banks can open accounts without RBI nod if the individual holds a valid visa and residential permit from FRO/FRRO. Entities of Bangladesh ownership still need RBI approval.
What it means for you
Banks can now serve Bangladesh nationals residing in India more efficiently, reducing turnaround time for NRO account opening. However, banks must implement robust quarterly reporting to the Ministry of Home Affairs, adding compliance overhead. This aligns with India's broader financial inclusion and ease of living for foreign residents.
What you must do
- Update internal KYC and account opening policies to include verification of valid visa and FRO/FRRO permit for Bangladesh nationals.
- Set up a quarterly reporting mechanism at each branch to capture and forward account details to your Head Office.
- Ensure Head Office submits consolidated quarterly reports to the Ministry of Home Affairs (Under Secretary, Foreigners) with all required fields.
- Train branch staff on the new procedure and documentation requirements for NRO accounts of Bangladesh individuals.
Who it affects
Authorised Dealer banks and Authorised banks, Branch operations teams handling NRO accounts, Compliance and reporting departments, Bangladesh nationals residing in India with valid visa and FRO/FRRO permits
Do we still need RBI approval for NRO accounts of Bangladesh entities?
Yes, the circular clearly states that opening of accounts by entities of Bangladesh ownership continues to require prior approval from the Reserve Bank.
What details must be included in the quarterly report to the Ministry of Home Affairs?
The report must include the individual's name, date of arrival in India, passport number and place/country of issue, residential permit reference with date and place of issue, name of the FRO/FRRO, and the complete address and contact number of the branch maintaining the account.
Does this circular apply to Pakistan nationals as well?
No, the relaxation is only for individuals of Bangladesh nationality. For Pakistan nationals, the earlier requirement of RBI approval for opening NRO accounts remains unchanged.