Personal Finance
E-Manangement
Utilities
 
NRI Investment Options











Bank Accounts:

How does an NRI open an account?

Very simple! Just fill in the "account opening form" and send it to any of the branches along with the remittance, which could be by Cheque, Draft, or a Telegraphic transfer.

What are the various kinds of NRI accounts which can be opened?

NRI accounts can be broadly classified into FCNR, NRNR, NRE, & NRO accounts.

FCNR accounts are those where the money remitted from abroad is kept in foreign currency and the entire exchange risk is borne by the the Bank .

NRE & NRO accounts are those where the deposit is maintained in Rupee currency .

NRNR deposits are those which are maintained in Indian Rupees on and the funds cannot be repatriated. However the interest earned on the NRNR deposit is repatriable and can be linked to the NRE account for outward remittances.

How is an NRE account different from an NRO?

Funds remitted from abroad or local funds which can otherwise be remitted abroad to the account holder, can be credited to NRE accounts. Local funds which do not qualify for remittance abroad are required to be credited to NRO accounts.

What is the minimum balance required to be maintained in the various accounts?

Saving account for NRE & NRO schemes require a minimum balance of Rs 5000/ and FCNR deposits need to have foreign currency equivalent of USD 10,000 .

In the NRNR type of scheme is the interest component repatriable?

Yes. The interest component is fully repatriable.

Is there a facility of a loan against FCNR deposits, if so what are the prevailing rates of Interest?

Yes.Loans can be taken not only against FCNR deposits but also against other NRI deposits. The rate of interest on FCNR loans charged to the Bank depends upon the rate of interest applicable to FCNR deposit, prevailing forward cover costs and Bank's nominal spread.

How does one qualify for availing portfolio management services for the NRIs?

Minimum requirements here are that the account should have a minimum balance of Rs.100,000/ in the account. The portfolio should have a minimum size of Rs. 50 lacs and the transaction amount should be at least 1 lac.

Is the interest rate SIMPLE or COMPOUNDED ? If Compounded then at what period?

All Interest rates are compounded quarterly. But for FCNR the interest is compounded on 180 days basis.

Can joint accounts be opened? If so then does the other holder necessary has to be an NRI, can he be an Indian resident?

Yes, joint accounts can be opened and it is only in case of Non repatriable deposits (NRO) (NRNR) that joint accounts can have a close relative who is a Indian resident as a joint holder, otherwise for all other accounts the joint holders have to be NRIs.

What about exchange risks?

Exposure to exchange rates vary from one account to the other. In case of accounts which holds funds in Indian rupees as in NRO, NRE, NRNR the exchange risk is borne by the depositor. In case of accounts which holds money in foreign currency, the amount is fully insulated against exchange risk.

It is required to pay tax on the deposit and interest?

In case of NRO accounts the deposit is subjected to wealth tax for the deposit amount and income tax at source for the interest earned. For all the other schemes Deposit and Interest earned is exempt from Indian income tax.

In case of a joint account held along with a resident Indian, what are the tax implications, on the interest income, is it for the resident Indian or for the NRI to take care of the Tax payments?

Deposits and interest are exposed to income tax only in case of NRO accounts, all the other account types are not subject to income tax. And also it is only in case of NRNR accounts that that an Indian resident is allowed to be a joint A/C holder. So in effect the resident Indian is not exposed to any tax obligations.

Can any resident Indian be authorised to operate the account ?

Yes. A resident Indian can be authorised to operate the account but only through a power of attorney/letter of authority. Operations are restricted for local payments and "permitted transactions" for which general or specific permission of Reserve Bank of India is available. 






  • Property
    

    

                    
                    
    
                      
                        
    
                          
                          
    
                            
                              
    Non-resident Indian citizens do not require
                              permission of Reserve Bank to acquire
                              residential/commercial property in India.
                              

    Reserve Bank has granted general
                              permission to foreign citizens of Indian origin,
                              whether resident in India or abroad, to purchase
                              immovable property in India for their bona fide
                              residential purpose. They are, therefore, not
                              required to obtain permission of Reserve Bank.
                              

    Foreign citizens of Indian origin can
                              acquire any immovable property other than
                              agricultural land/farm house/ plantation property
                              in India by purchase, from out of
    
                              
      
                                
    1. funds received in India by way of inward
                                remittance from any place outside India
                                
    2. funds held in any non-resident account
                                maintained in accordance with the provisions of
                                the Act and the regulations made by the Reserve
                                Bank under the Act
                                
    3. by way of gift from a person resident in
                                India or from a person resident outside India
                                who is a citizen of India or from a person of
                                Indian origin resident outside India
                                
    4. acquire any immovable property in India by
                                way of inheritance from a person resident
                                outside India who had acquired such property in
                                accordance with the provisions of the foreign
                                exchange law in force at the time of acquisition
                                by him or the provisions of these Regulations
                                (FEMA) or from a person resident in India;
                              
    
                              
    They are required to file a declaration in form
                              IPI 7 with the Central Office of Reserve Bank at
                              Mumbai within a period of 90 days from the date of
                              purchase of immovable property or final payment of
                              purchase consideration along with a certified copy
                              of the document evidencing the transaction and
                              bank certificate regarding the consideration paid.
                              

    Reserve Bank has granted general
                              permission for sale of such property. However,
                              where the property is purchased by another foreign
                              citizen of Indian origin, funds towards the
                              purchase consideration should either be remitted
                              to India or paid out of balances in NRE/FCNR
                              accounts.

     

    In the event of
                              sale of immovable property other than agricultural
                              land/farm house /plantation property in India by a
                              person resident outside India who is a citizen of
                              India or a person of Indian origin, the authorised
                              dealer may allow repatriation of the sale proceeds
                              outside India, provided the following conditions
                              are satisfied, namely -
    
                              
      
                                
    1. the immovable property was acquired by the
                                seller in accordance with the provisions of the
                                foreign exchange law in force at the time of
                                acquisition by him or the provisions of these
                                Regulations;
                                
    2. the sale takes place after three years from
                                the date of acquisition of such immovable
                                property or from the date of payment of final
                                instalment of consideration for its acquisition,
                                whichever is later; and
                                
    3. the amount to be repatriated does not exceed

                                
        
                                
      1. the amount paid for acquisition of the
                                immovable property in foreign exchange received
                                through normal banking channels or out of funds
                                held in Foreign Currency Non-Resident Account or

                                
      2. the foreign currency equivalent ,as on the
                                date of payment, of the amount paid where such
                                payment was made from the funds held in
                                Non-Resident External account for acquisition of
                                the property; 
      
                                
    4. in the case of residential property, the
                                repatriation of sale proceeds is restricted to
                                not more than two such properties. 
    
                              
    Applications for repatriation of sale proceeds
                              are considered provided the sale takes place after
                              three years from the date of final purchase deed
                              or from the date of payment of final instalment of
                              consideration amount, whichever is later.
                              

    Applications for necessary permission for
                              remittance of sale proceeds should be made in form
                              IPI 8 to the Central Office of Reserve Bank at
                              Mumbai within 90 days of the sale of the property.
                              

    Reserve Bank has granted general
                              permission to foreign citizens of Indian origin to
                              acquire or dispose of properties up to two houses
                              by way of gift from or to a relative who may be an
                              Indian citizen or a person of Indian origin
                              whether resident in India or not, subject to
                              compliance with applicable tax laws.
                              

    General permission has been granted by
                              Reserve Bank to non-resident persons (foreign
                              citizens) of Indian origin to transfer by way of
                              gift immovable property held by them in India to
                              relatives and charitable trusts/organisations
                              subject to the condition that the provisions of
                              any other law, including Foreign Contribution
                              (Regulation) Act, 1976, as applicable, are duly
                              complied with. 

    Under the general
                              permission granted by Reserve Bank properties
                              other than agricultural land/farm house/plantation
                              property can be acquired by foreign citizens of
                              Indian origin provided the purchase consideration
                              is met either out of inward remittances in foreign
                              exchange through normal banking channels or out of
                              funds from the purchasers' NRE/FCNR accounts
                              maintained with banks in India and a declaration
                              is submitted to the Central Office of Reserve Bank
                              in form IPI 7 within a period of 90 days from the
                              date of purchase of the property/final payment of
                              purchase consideration. 

    Repatriation of
                              original investment in respect of properties
                              purchased by foreign citizens of Indian origin on
                              or after 26th May 1993 will be allowed to be
                              remitted up to the consideration amount originally
                              remitted from abroad provided the property is sold
                              after a period of three years from the date of the
                              final purchase deed or from the date of payment of
                              final instalment of consideration amount,
                              whichever is later. Applications for the purpose
                              are required to be made to the Central Office of
                              Reserve Bank within 90 days of the sale of
                              property in form IPI 8. 

    Reserve Bank has
                              granted general permission for letting out any
                              immovable property in India. The rental income or
                              proceeds of any investment of such income are
                              eligible for repatriation. 

    Reserve Bank
                              has granted general permission to certain
                              financial institutions providing housing finance
                              e.g. HDFC, LIC Housing Finance Ltd., etc., and
                              authorised dealers to grant housing loans to
                              non-resident Indian nationals for acquisition of a
                              house/flat for self-occupation subject to certain
                              conditions. The purpose of the loan, margin money
                              and the quantum of loan will be at par with those
                              applicable to housing loans to residents.
                              Repayment of loan should be made within a period
                              not exceeding 15 years out of inward remittances
                              or out of funds held in the investors'
                              NRE/FCNR/NRO accounts. 

    Reserve Bank
                              permits Indian firms/companies to grant housing
                              loans to their employees deputed abroad and
                              holding Indian passports subject to certain
                              conditions. 

    Authorised dealer can grant
                              housing loan to non-residents of Indian
                              nationality where he is a principal borrower with
                              his resident close relative as a
                              co-obligant/guarantor or where the land is owned
                              jointly by such NRI borrower with his resident
                              close relative. However, in such cases the payment
                              of margin money and repayment of the loan
                              instalments should be made by the NRI borrower.
  • Company FDs

    General permission to Indian companies (including non-banking finance companies registered with Reserve Bank) has been granted to accept deposits from NRIs/PIOs/OCBs with repatriation benefits subject to certain conditions.

    A company registered under Companies Act, 1956 or a body corporate or created under an act of Parliament or State Legislature (including a non-banking finance company registered with Reserve Bank) may accept deposits from a NRIs, on repatriation basis subject to the following conditions -

    1. The deposits are received under a public deposit scheme.

    2. If the deposit accepting company is a non-banking finance company, it should be registered with the Reserve Bank and should have obtained the required credit rating as stipulated under the guidelines issued by Reserve Bank for such companies.

    3. The amount representing the deposit is received by inward remittance from outside India through normal banking channels or by debit to the Non-Resident (External) Account or Foreign Currency (Non-Resident) (Bank) Account maintained with an authorised dealer/authorised bank in India.

    4. If the deposit accepting company is a non-banking finance company the rate of interest payable on deposits shall be in conformity with the guidelines/directions issued by Reserve Bank for such companies. In other cases the rate of interest payable on deposits shall not exceed the ceiling rate prescribed from time to time under the Companies (Acceptance of Deposit) Rules, 1975.

    5. The maturity period of deposits shall not exceed 3 years.

    6. The company accepting the deposits shall comply with the provisions of any other law, rules, regulations, orders issued by the Government of India or any other competent authority, as are applicable to it in regard to acceptance of deposits.

    7. The amount of aggregate deposits accepted by the company shall not exceed 35% of its net owned funds.

    8. The payment of interest net of taxes may be made by the company to the depositor by remittance through an authorised dealer or by credit to the depositor's NRE/FCNR(B)/NRNR/NRO/NRSR account as desired by him.

    9. The amount of deposits so collected shall not be utilised by the company for re-lending (not applicable to a Non-Banking Finance Company) or for undertaking agricultural/plantation activities or real estate business or for investing in any other concern, firm or a company engaged in or proposing to engage in agricultural/plantation activities or real estate business.

    10. The repayment of the deposit may be made by the company to the depositor by remittance from India through an authorised dealer or by credit to the depositor's NRE/FCNR(B) account maintained with an authorised dealer in India, provided the depositor continues to be a nonresident at the time of repayment. While applying to the authorised dealer for remittance of maturity proceeds of deposit or credit thereof to NRE/FCNR(B) account , the company should certify that the amount of deposit was received either by inward remittance from outside India through normal banking channels or by debit to the depositor's NRE/FCNR(B) account, as the case may be.

    11. The amount representing repayment of deposit may also be credited to the depositor's NRNR/NRO or NRSR account, at the depositor's option.

     
    • Govt. Securities
    NRIs are freely permitted to invest their funds in Government securities or Units of UTI through authorised dealers. Units can also be purchased directly from UTI.

    Investments in National Savings Certificates can be made by NRIs subject to the terms and conditions applicable to the sale/issue of such certificates. However, NRIs are not permitted to invest in bearer securities like Indira Vikas Patra/Kisan Vikas Patra.

    Government securities and units can be freely transferred or sold provided the transfers/sales are arranged through an authorised dealer. Units can, however, be repurchased directly by UTI.

    If such securities were purchased out of funds remitted from abroad or out of NRE/FCNR accounts, sale/maturity proceeds can be repatriated. Sale/maturity proceeds of securities purchased out of funds in NRO accounts can only be credited to NRO accounts and cannot be remitted abroad. Interest earned during the financial year 1994-95 and onwards can, however, be remitted to the extent permitted by Reserve Bank.
  • Shares

    NRIs are permitted to make direct investments in proprietary/partnership concerns in India as also in shares/debentures of Indian companies.They are also permitted to make portfolio investments i.e. purchase of shares/debentures of Indian companies through stock exchange/s in India. These facilities are granted both on repatriation and non-repatriation basis. 

    

  • Repatriable Investments
    
                          
    

						                      
						                      
    
						                        
						                          
    
						                            
						                            
    
						                              
						                                
    
                   NRIs can make investments in new issues of
                              shares/convertible debentures of Indian companies
                              under direct investment schemes such as 24%
                              scheme/51% scheme/100% scheme. They can also
                              invest in the schemes of domestic Mutual Funds
                              floated by public/private sector
                              institutions/companies. Non-resident investors are
                              not required to apply for permission to invest.
                              The company concerned will have to file a
                              declaration in Form ISD together with the required
                              documents to Reserve Bank within 30 days from the
                              date of issue. 

    Under the 24% Scheme,
                              Indian companies engaged or proposing to engage in
                              any activity including finance, hire purchase,
                              leasing, trading or other services, establishment
                              of schools/colleges, etc. (except
                              agricultural/plantation activities) are allowed to
                              issue shares/debentures to NRIs with repatriation
                              benefits to the extent of 24% of the new issue.
                              

    Under the 51% Scheme, NRIs/OCBs are
                              permitted to subscribe to new issues of
                              equity/preference shares and convertible
                              debentures of any new or existing company on
                              repatriation basis provided 
    
                              
      
                                
    1. The issue of equity/preference shares and
                                convertible debentures to NRIs/OCBs with
                                repatriation benefits does not exceed 51 per
                                cent of the face value of each new issue of the
                                company.
                                
    2. The shares of the company are not listed on
                                any stock exchange, and
                                
    3. The company is engaged in manufacturing
                                activity not being an activity specified in
                                Annexure III to the Statement of Industrial
                                Policy 19991 of Government of India amended from
                                time to time. 
    
                              
    Investment under this scheme can be made for
                              setting up new manufacturing projects or for
                              expansion/diversification of their existing
                              manufacturing activities. 

    There is no
                              ceiling or restriction on the amount of remittable
                              dividend under the 24% and 51% schemes. Remittance
                              of interest/dividend to NRI investors will be
                              allowed by authorised dealers under the powers
                              delegated to them. 

    Under 100% Scheme, NRIs
                              are permitted to invest in high priority
                              industries listed in Annexure III to the Statement
                              on Industrial Policy dated 24th July 1991 of the
                              Government of India up to 100% of the new issue.
                              Dividend/interest can be remitted freely except in
                              the case of consumer goods industries where the
                              outflow on account of dividend is required to be
                              balanced by export earnings of the company either
                              in the year of declaration of dividend or in the
                              years prior to the declaration of dividend. This
                              requirement is enforced for a period of seven
                              years from the commencement of commercial
                              production. 

    The NRI investor need not
                              apply to Reserve Bank for investment under the
                              24%, 51% or 100% schemes. Indian companies have
                              been permitted to issue shares/convertible
                              debentures to NRIs/OCBs. 

    Other than these
                              three schemes, NRIs are permitted to undertake
                              revival of sick industrial units by making bulk
                              investment in them to the extent of 100 per cent
                              either by way of purchase of existing equity
                              shares or in the form of subscription to new
                              equity issues. The capital brought into India for
                              revival of the sick unit can be repatriated.
                              

    Application for necessary permission to
                              undertake revival of sick industrial units should
                              be made by the Indian company to the Central
                              Office of Reserve Bank in Mumbai in form RSU.
                              

    Under the existing Industrial Policy,
                              investment by foreign collaborators upto
                              50%/51%/74% of the equity is allowed by Reserve
                              Bank on repatriation basis in certain high
                              priority industries. NRIs can take up the balance
                              50%/49%/26% equity in such cases on repatriation
                              basis. 

    Investment upto 100% in the new
                              issue of equity shares/convertible debentures of
                              Indian companies engaged in the following areas is
                              allowed -
    
                              
      
                                
    1. Development of serviced plots and
                                construction of built up residential premises;
                                
    2. Real estate covering construction of
                                residential and commercial premises (including
                                business centres and offices;
                                
    3. Development of township;
                                
    4. City and region level urban infrastructure
                                facilities including roads and bridges;
                                
    5. Manufacture of building material;
                                
    6. Financing of housing development. 
    
                              
    Application for the purpose should be made by
                              the concerned Indian company to the Central Office
                              of Reserve Bank in Mumbai [in Form ISD(R)].
                              

    Repatriation of original investment will
                              be permitted after a lock-in period of three years
                              from the date of issue of the equity
                              shares/convertible debentures. In addition, OCBs
                              will be permitted to repatriate net profit (upto
                              16 per cent) arising from the sale of such
                              investment after the lock-in-period of three
                              years. (This facility is, however, not available
                              to individual NRIs.) Annual dividend/interest on
                              equity shares/debentures can, be freely remitted
                              subject to payment of tax, however rate of
                              dividend on preference share shall not exceed 300
                              basis points over the Prime Lending Rate of State
                              Bank of India prevailing as on the date of the
                              Board meeting of the company in which issue of
                              such shares is recommended. 

    Investments
                              upto 100% equity participation for carrying on Air
                              Taxi operations are permitted in terms of the
                              guidelines issued by the Director General of Civil
                              Aviation for Air Taxi operations. Reserve Bank has
                              granted general permission to Indian companies
                              engaged in Air-Taxi operations to issue shares
                              subject to certain conditions. The concerned
                              company should file a declaration in form ISD(R)
                              within 30 days from date of issue to Reserve
                              Bank.

    NRIs can invest in non-convertible
                              debentures on repatriation basis. Application for
                              necessary permission should be made to Reserve
                              Bank (Central Office) by the concerned Indian
                              company in form ISD(R).

    Reserve Bank has
                              granted general permission to domestic mutual
                              funds to issue units/similar instruments to
                              NRIs/OCBs on both repatriation basis and
                              non-repatriation basis. 

    NRIs will be
                              permitted to invest up to 100% in 100% Export
                              Oriented Units subject to obtaining approval from
                              the Government of India, Ministry of Industries
                              (SIA) for setting up the EOU.

    Reserve Bank
                              has granted general permission to NRIs to acquire
                              shares of PSEs on their bids being successful
                              provided the holding of a single NRI investor does
                              not exceed one per cent of the paid up capital of
                              the PSE concerned, the purchase consideration/bid
                              money is paid by way of remittance from abroad or
                              by debit to his NRE/FCNR accounts.

    For
                              issue of rights entitlement to NRIs, the concerned
                              company should approach Reserve Bank for issue of
                              rights entitlement to NRIs in the prescribed form
                              if on repatriation basis. However, rights
                              entitlement on non-repatriation basis would be
                              covered by the general permission.

    For
                              renunciation of rights entitlement, NRIs can make
                              an application to Reserve Bank by a letter
                              detailing therein the folio number of the shares
                              held and the manner in which the rights are being
                              sold.

    For issue of bonus shares, the
                              concerned Indian company should approach Reserve
                              Bank for issue of bonus shares to NRIs if the
                              original investment is on repatriation basis.
                              Issue of bonus shares in respect of investment on
                              non-repatriation basis is covered by general
                              permission.

    Authorised dealer have been
                              permitted to grant loans/overdrafts abroad to NRIs
                              through their overseas branches and correspondents
                              against collateral of the shares/debentures of
                              Indian companies held by them, provided the
                              concerned shares/debentures were acquired on
                              repatriation basis. Proceeds of the
                              shares/debentures can be remitted abroad for
                              liquidation of outstandings against such
                              loans/overdrafts subject to payment of Income tax,
                              Capital Gains tax etc. payable, if any.
    • Non Repatriable

    NRI or a Person of Indian Origin resident outside India may invest by way of contribution to the capital of a firm or a proprietary concern in India, provided that -

    1. the amount invested is received either by inward remittance through normal banking channels or out of an account maintained with an authorised dealer/authorised bank by the non-resident Indian or the person of Indian origin in accordance with the relevant Regulations;

    2. the firm or the proprietary concern is not engaged in any agricultural/plantation activity or real estate business, i.e. dealing in land and immovable property with a view to earning profit or earning income therefrom;

    3. the amount invested shall not be eligible for repatriation outside India;

    4. where investment is made out of NRSR account of the non-resident investor, the income earned on investment or proceeds of investment shall be credited only to the NRSR account of the investor.

    NOTE: A firm or a proprietary concern in India may make payment to such person by way of profit on such investment.

    Indian companies have been granted general permission to accept investments on non-repatriation basis from NRIs, in shares/convertible debentures by way of new/rights issue provided the investee company is not engaged in agricultural/plantation activity or real estate business (excluding real estate development i.e. development of property and construction of house) or chit fund or is not a Nidhi company.

    There are no formalities required to be completed by NRIs for getting the benefit of investment in new issues of Indian companies on non-repatriation basis. However, the firms/companies concerned are required to file declarations with Reserve Bank in form DIN giving particulars of the investments made, within ninety days from the date of the investment.

    NRI/OCBs can make investments in domestic public/private sector Mutual Funds or Money Market Mutual Funds floated by commercial banks and public/private sector financial institutions on non-repatriation basis.

    NRIs can make investments in non-convertible debentures of Indian companies.

    Purchase and sale of shares/convertible debentures by a Non-resident Indian (NRI) or an Overseas Corporate Body (OCB), on non-repatriation basis under following conditions -

    1. Prohibition on purchase of shares/convertible debentures of certain companies:
      No purchase of shares or convertible debentures of an Indian company shall be made under this Scheme if the company concerned is a Chit Fund or a Nidhi company or is engaged in agricultural/plantation activities or real estate business or construction of farm houses or dealing in Transfer of Development Rights.
      Explanation: For the purpose of this paragraph, real estate business shall not include development of township, construction of residential/ commercial premises, roads, bridges, etc.

    2. Permission to purchase and/or sell shares/convertible debentures of an Indian company:
      Non-resident Indian or an Overseas Corporate Body may, without any limit, purchase on non-repatriation basis, shares or convertible debentures of an Indian company issued whether by public issue or private placement or right issue (Subject to provisions as per 1 above).

    3. Method of payment for purchase of shares/convertible debentures:
      The amount of consideration for purchase of shares or convertible debentures of an Indian company on non-repatriation basis, shall be paid by way of inward remittance through normal banking channels from abroad or out of funds held in NRE/FCNR /NRO/NRSR/NRNR account maintained with an authorised dealer or as the case may be with an authorised bank in India. Provided that in the case of an NRI/OCB resident in Nepal and Bhutan, the amount of consideration for purchase of shares or convertible debentures of an Indian company on non-repatriation basis, shall be paid only by way of inward remittance in foreign exchange through normal banking channels.

    4. Sale/Maturity proceeds of shares or convertible debentures:
      1. The sale/maturity proceeds (net of applicable taxes) of shares or convertible debentures purchased under this Scheme shall be credited only to NRSR account where the purchase consideration was paid out of funds held in NRSR account and to NRO or NRSR account at the option of the seller where the purchase consideration was paid out of inward remittance or funds held in NRE/FCNR/NRO/NRNR account.
      2. The amount invested in shares or convertible debentures under this Scheme and the capital appreciation thereon shall not be allowed to be repatriated abroad.

    Reserve Bank has granted general permission to companies in India to enter the overseas addresses of the shareholders in their books in such cases provided the companies obtain undertakings from the holders that they will not seek repatriation of any sale proceeds of the security. So if you are a resident, and intend to become a non-resident, you needn't worry about the securities you currently hold.

    Income/interest accruing during the financial year 1994-95 and onwards on bank deposits and investments held by NRIs with non-repatriation benefits will be eligible for repatriation as below -

    1. Up to U.S. $ 1,000 or its equivalent in full and one-third of the balance income earned during the financial year 1994-95;

    2. Up to U.S. $ 1,000 or its equivalent in full and two-third of the balance income earned during the financial year 1995-96;

    3. The entire income earned during the financial year 1996-97 and onwards.

    The investment/principal amount of deposits made/held on non-repatriation basis (will, however, not be allowed to be repatriated abroad. Further funds held in NRSR accounts and/or interest/income accrued on funds held in these accounts will not be be allowed to be repatriated abroad.

    In order to repatriate such income, NRIs should designate a branch of an authorised dealer through whom the remittance of income is to be made and make an application in form RCI to the designated branch giving details of incomes earned during the previous financial year along with a Chartered Accountant's Certificate. The designated branch will allow the remittance of net amount (i.e. after payment of tax) or credit it to NRE/FCNR account of the applicant.
  • Insurance

    • Who is a non-resident Indian?
    Who are the foreign nationals not permanently resident in India?
    Is insurance allowed on the lives of persons working in foreign airlines?
    What is foreign currency?
    What are the currencies in which policies can be issued?
    Can NRIs take rupee-currency policy of LIC ?
    Can NRIs take foreign-currency policy of LIC ?
    Can a person residing in India hold a foreign currency policy?
    What are the types of schemes offered by LIC to NRIs ?
    What is the maximum insurance cover allowed to NRIs?
    Does LIC offer Overseas Medical Insurance for people visiting abroad ?
    How can an NRI pay the premium under the policy ?
    Is loan permitted to the NRIs on policies held by them?
    What are the modalities for NRIs to take a housing loan from LIC?
    What are the rules governing settlement of claim?
    How can the NRIs receive the claim amount?
    Can the records of a rupee policy be transferred out of India?
    How can a policy-holder get his policy records transferred to India?
    Can a policy-holder take the policy document out of the country?
    Can a policy-holder assign his policy ?
    What is Mail Order Business?
    What are the addresses of foreign offices of LIC ?

    Q.Who is a non-resident Indian?
    A non-resident is a person other than a 'person resident in India.' For the purpose of transactions in Indian rupees, Indians, Nepalese and Bhutanese are treated as persons resident in India.

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    Q. Who are the foreign nationals not permanently resident in India?
    The foreign nationals who are resident in India purely on account of their employment, profession or business with a valid employment/ business visa, are treated as persons not permanently resident in India. Persons of Indian origin holding foreign passports and resident in India, are not treated as permanently resident in India unless they have been resident in India for employment of a specified duration (irrespective of the length of service) or for a specific job or assignment, the duration of which does not exceed 3 years.

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    Q.Is insurance allowed on the lives of persons working in foreign airlines?
    There is no restriction on that.

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    Q.What is foreign currency?
    It means any currency other than the currencies of India, Nepal and Bhutan.

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    Q.What are the currencies in which policies can be issued?
    Policies can be issued to:
    (i) Residents in rupees
    (ii) Non-residents in rupee or foreign currency
    (iii) Returning Indians in foreign currency

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    Q.Can NRIs take the rupee-currency policy of LIC ?
    Yes.

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    Q.Can NRIs take the foreign-currency policy of LIC ?
    In India, LIC markets only the rupee-currency policy. However, clients residing in UK, Fiji and Mauritius can take pound sterling-, Fiji dollar- and Mauritian rupee-denominated policies, respectively, from LIC's branch offices in those countries. Similarly, LIC (International) E.C., Bahrain - a subsidiary of LIC - operates among NRIs in Bahrain, Saudi Arabia and Kuwait. Clients can take US dollar-, Bahrain dinar- and Saudi riyadh-currency policies from them.

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    Q.Can a person residing in India hold a foreign-currency policy?
    A permanent resident of India cannot hold a foreign currency policy. However, a person resident in India but not permanently resident may continue to hold any insurance policy issued to him by an insurer outside India, if the premium on such policy is paid out of foreign currency resources outside India.

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    Q.What are the different types of schemes offered by LIC to NRIs?
    All individual schemes marketed by LIC in India are available to temporary NRIs holding Indian Passports. However, in case of foreign nationals of Indian origin, joint-life policies, plans having term insurance element, such as Bima Kiran and Bima Sandesh, and health insurance plans such as Asha Deep and Jeevan Asha are not allowed.

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    Q. What is the maximum insurance cover allowed to NRIs?
    There is no limit. In case of foreign nationals of Indian origin, the cover is restricted to Rs 20 lakh for all policies taken together.

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    Q. Does LIC offer overseas medical insurance for people visiting abroad ?
    No, LIC does not have any scheme of medical insurance for people traveling abroad.

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    Q. How can an NRI pay the premium under a policy ?
    The manner of payment of premia under a policy are as follows:
    a) For rupee policies on NRIs
    i.By direct remittance from abroad through banking channels in approved manner (preferably by Indian rupee drafts drawn in favour of LIC of India) or by remittances through postal channels like foreign money order.
    ii. By payment out of funds held in non-resident (external) account or foreign currency (non- resident) account with a bank in India.
    iii. By rupees derived by policy-holder by sale of foreign exchange such as foreign currency travellers cheques, demand drafts etc, provided encashment certificate issued by an authorised dealer in foreign exchange is provided.
    iv. By cheques drawn by non-resident policy-holder on bank accounts held in India in his own name (either solely or jointly with another member of the family) whether or not the account has been designated as non-resident.
    v. By cheque drawn on account maintained by resident parent or spouse of policy-holder in their own name or joint names with other close relatives.
    vi. By the absolute assignee in India wherever such policies have been absolutely assigned to a resident in India.
    vii. By the employers in respect of policies issued to their employees who have been deputed abroad by them.
    viii. premia can be paid in cash by a resident parent or spouse of the non-resident policy-holder subject to his / her submitting a letter stating the relationship with the policy-holder.
    ix. premia due on policies issued to Indian students who have gone abroad for higher studies may be collected in rupees out of the resident bank account in India or any of their representatives in India by cash or cheques.
    Note:
    In respect of premia collected in cash from sources mentioned in iii) to ix), it should be noted that the policy moneys cannot be paid abroad in foreign exchange but has to be paid in India only.

    b) For policies held on foreign register of LIC
    Premia on foreign-currency / rupee policies issued by overseas branches of LIC and held on their foreign register should be collected only in foreign currency.

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    Q. Are loans permitted to NRIs on policies held by them?
    Yes, loans are permitted. The rules governing settlement of claims apply on payment of loan as well.

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    Q.What are the modalities for NRIs to take a housing loan from LIC?
    LIC has a special scheme, Griha Shobha, for housing loan for the NRIs. Its details are:
    Loans available for :
    1.Construction of new house/flat
    2.Purchase of an already built (even old)house/flat
    3.Extension to a house/flat Amount of Loan Rs. 25,000 to RS.50,00,000 not exceeding 75% of total value of the property

    Maximum term of the loan is 7 to 10 years, which differs on case-to-case basis.

    Mode of Repayment:
    Equated Monthly Instalments (EMI) Security
    1.Equitable Mortgage of House/Flat
    2.One Guarantor

    Life Insurance Cover:
    Any existing or new policy issued under any acceptable plan of insurance having insurance cover to the extent of loan amount

    RBI Regulations:
    The scheme is applicable to NRIs holding an Indian passport. Remittance of premium, repayment of loan, applicant's share of cost, etc., to be paid out of NRE/FCNR/NRO account held by the applicant or by direct remittances from abroad.

    LIC Housing Finance Ltd., a subsidiary of LIC, looks after this portfolio. Interested clients may access their website "http//www.lichfl.com". All the requisite information regarding housing loans to NRIs is available there.

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    Q.What are the rules governing settlement of claims?
    The basic rule is that the payment of claims or surrender value in foreign currency will be permitted when
    (i) the claimant is permanently resident outside India and
    (ii) all the premia under the policy have been paid in foreign currency or by remittances from abroad through approved channels.

    Where the premia have been paid partly in Indian rupees and partly in foreign currency, the payment in foreign currency is in proportion to the amount of premia paid by remittance from abroad to the total premia paid.

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    Q.How can the NRIs receive the claim amount?
    Payment claim amount can be made freely in India (a) to the policy-holders themselves during their temporary visit to India (b) to the policy-holders' close relatives in India (c) by crediting the amount to policy-holder's resident or non-resident account with an authorised dealer in India.

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    Q.Can the records of a rupee policy be transferred out of India?
    Records of a rupee life insurance policy cannot be transferred from an office in India to an office outside India without prior approval of the Reserve Bank. Such transfers are authorised only if transfer of actuarial reserves is not involved or the policy-holder is eligible for a capital transfer from India.

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    Q.How can a policy-holder get his policy records transferred to India?
    LIC can freely transfer policy records of life insurance policies issued by their offices abroad in the following cases:
    (a) Transfer from a foreign register of records relating to foreign currency as well as rupee policies issued by LIC's overseas offices to non-resident Indian nationals and persons of Indian origin on the policy-holders returning to India for permanent residence.
    (b) Transfer from a foreign register to Indian register, of records relating to foreign currency as well as rupee policies where

    • all the premia have been paid in foreign currency abroad and
    • actuarial reserves, held abroad, have been repatriated to India.

      Cases not covered by the above two provisions require the permission from Reserve Bank before their transfer to India.
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    Q.Can a policy-holder take the policy document out of the country?
    A policy document can not be exported out of the country without the permisssion of Reserve Bank of India, as a life insurance policy is regarded as security in terms of foreign exchange regulations.

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    Q.Can a policy-holder assign his policy ?
    Assignment is permitted if it is without any monetary consideration in favour of the policy-holder's non-resident wife or other dependent relatives. In other cases, permission from Reserve Bank is necessary.

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    What is Mail Order Business?
    A non-resident Indian residing in a foreign country can submit his proposal for insurance to any Branch Office in India through mail. Such a proposal is called Mail Order Business.

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    Q. What are LIC's foreign office addresses?
    The addresses of LIC's foreign offices are as stated below.

    U.K. Branch :
    LIC of India York House, 6th floor,
    Empire Way, Wembley,
    Middlesex - HA9OPX.
    U.K.
    Telephone : (0044) 0181 902 5294/5
    Fax : (0044) 0181 902 5281
    E-Mail : liciuk@dircon.co.uk

    Mauritius Branch :
    LIC of India
    LIC Centre
    President John Kennedy Street
    Port Louis
    Mauritius
    Telephone : 208 1485/211 0572/211 0465
    Fax : (0230) 208 6392
    E-Mail : licmm@bow.intnet.mu

    Fiji Branch :
    LIC of India
    LIC House
    Butt Street
    G.P.O. Box 266
    Suva
    Fiji Island
    Telephone : (0679) 304 148
    Fax : (0679) 312 499
    E-Mail : lici@is.com.fj

    Bahrain Office :
    LIC (International) E.C. :
    1st floor, Ali Al - Wazzan Bldg.
    Al - Khalifa Avenue
    P.O.Box 584
    Manama,
    Bahrain
    Telephone : (0973) 210 610
    Fax : (0973) 211 577
    E-mail : intcolic@batelco.com.bh


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