Can NRI ask a resident to operate his NRE/NRO accounts on his behalf? :-ET FEB 27, 2023 Sneha Kulkarni

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Types of accounts NRIs can hold

NRIs can maintain the following types of accounts:

1) Non-Resident (External) Rupee Account (NRE account)

2) Non-Resident (Ordinary) Rupee Account (NRO account)

3) Foreign Currency (Non-Resident) Account (FCNR account)

What is the NRE account?

An NRE account is a rupee account held with a bank. Funds in an NRE account can be easily repatriated. In the hands of an NRI, interest credited to an NRE account is tax-free. NRE accounts can be opened using money sent from overseas or made in India.

What is an NRO account?

NRIs can open NRO accounts to conduct legal transactions in rupees. The NRO account balance is generally non-repatriable. Funds in NRO accounts, on the other hand, can be remitted abroad subject to the limits and conditions imposed by RBI directives at the time of repatriation. NRO account balances must only be used for rupee payments within India.

Can an NRI maintain multiple accounts with different banks in India, simultaneously?

There is no restriction on opening and maintaining several accounts.

Can NRI accounts be opened from abroad also?

An NRI can also open accounts from abroad by sending duly filled and signed AOF duly attested by Indian Consulate along with attested copies of passport and Visa, etc, as per the Union Bank of India website.

Can an NRI give Power of Attorney to a resident to operate his accounts and for making investments on his behalf?

An NRI can appoint a Power of Attorney holder to make local payments from his NRE / NRO a/cs. and also investments on his / her behalf, as per the Union Bank of India website.

What are the restrictions imposed on the Power of Attorney?

A Power of Attorney holder cannot do the following acts :

1) Open and close NRI a/cs. in the name of NRI

2) Repatriate funds from a/c. in the form of DD/TT etc.., unless specified in P.A.

3) Give gifts.

4) Transfer funds to NRE accounts other than that of the principal.

5) Cannot raise loans/execute documents on behalf of NRI.

6) Cannot tender FC/FCTC.