NRI Banking

Submitted by केशर on 6 March, 2008 - 00:29

For the global Indian, a Non-Residential External (NRE) ...we can discuss all our Banking queries.

The types of accounts that an NRI can open in India are NRE (Rupee Repatriable) FCNR (Dollar, Pound, Euro, Yens, Can dollars & Aus Dollars) & NRO (Rupee Non Repatriable).

NRE account is a rupee account from which funds are freely repatriable.
FCNR accounts can be opened in five different currencies viz., US dollar, Pound Sterling, Euro, Jap Yen, Canadian Dollar & Australian Dollar. They are in the form of fixed deposits only and the minimum period of deposit is 12 months.
NRO account is a Rupee denominated account which is not repatriable. This account is basically for your rupee funds generated in India.

Features & Benefits of NRE account
* Can Deposit & withdraw money.
* requires minimum account balance
* Mandate card for your family in India, giving them anytime, anywhere access to your account.
* International ATM-cum-debit card
* Tax Exemptions - NRE accounts are not taxable in India

Interest on NRE and FNCR deposits are exempted from tax in India .

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Prr, माफ़ करा पण ही सगळी माहिती bank websitesवर उपलब्ध आहे त्यामुळे नवीन सुरु करण्यामागचे प्रयोजन समजले नाही. NRI Banking services बद्दल बोलायचे असेल तर सांगा, भरपुर "अनुभव" आहे

Prasadp77...मान्य आहे. पण नवीन लोकांना NRI Banking बद्दल फ़ारशी महिती नसते. ओळखीच्या लोकांना विचारले असता अजुन NRE account openच नाही केलेय असे समजले. (even after staying from 4-5yrs). Many ppl dont know the difference between NRE & NRO.
मी स्वत: कस्टमर सर्विसला बरेचसे प्रश्न विचारुन माहिती करुन घेते. पण सर्विस किती चांगली आहे? .... hidden charges असतात का?.. .. याबाबतीत काही समजले नाही. म्हणुन हा नवीन टॉपिक सुरु केला.
तुम्हाल भरपुर "अनुभव" आहे तर मग तुम्हालाच विचारते.
Which bank is good to open NRE account? How is your experince?

Apologies for writing in English.

I have tried few banks, would list pros and cons here below -

1. ICICI Bank - The goliath of Indian banks, offers loads of services and carrots like free money transfer to India or 80 minutes calling card to India if you refer to someone etc. etc.
Positives -
1. Very thorough information available on the website.
2. Best website to work with (this is very important when it comes to NRI as that is the only source for us when it comes to bank with them)
Negatives -
1. When it comes to transferring money to India, offers least possible exchange rate among the Indian banks I have used.
2. Customer service SUCKS.
3. Uptill now, after 6 years, they have failed to convert my savings account to NRE. They ask me for the documents I can not provide like american style visa. At last, after emailing/phoning, I have given up finally.
4. Lot of hidden charges in the services they offer, especially for NRI.
5. If your money gets lost in Money2India facility then you are all by yourself to trace the money. ICICI Bank will only "keep trying" to find your money. (I gave up using this facility after 6-7 successful attempts.)

2. State Bank of India -
Positives - None that I could really find.
Negatives -
1. Useless website
2. Babu attitude of the employees in the bank.
3. Totally hopeless customer service.

In nutshell, don't bother to go to them unless it is the only bank you have in your villege (and they just opened 10000th branch!!)

3. IDBI Bank
Positives -
1. Good customer service, problem resolution is very quick.
1. Has a weird issue while accepting money with NRE accounts i.e. if you transfer money from NRE account to IDBI savings account, they would refuse the funds with the comment "Source of the funds not specified" I don't know why on the earth they want to know that.
2. Website is pretty bad, employs lot of pop-ups (looks like their IT-admin is not aware that most of the PC users install pop-up blockers)
3. Website works only on Internet Explorer. Good Luck, if you are a linux or mac user.

4. Axis Bank
Positives -
1. Good customer service (but that doesn't always mean problem resolution.)
2. Offers better exchange rate while making wire transfer.
3. No hidden charges as such.
Negatives -
1. Customer service Babus are not well informed. They are only aware of the US and UK banking system. IMHO, they feel like all world banks exactly as US/UK. If you decide to make a wire transfer, they give you 2 SWIFT codes, one of the bank that serves as intermediate bank (forgot the exact word) and another of Axis Bank. I am yet to see any wire transfer form where there are options to enter 2 SWIFT codes. I had a very hard time to educate them on Swedish banking system. At the end, they failed to understand so I gave up the "email class".
2. Website is "pretty bad".
2a. When you make transactions on the website, the transactions appears very cryptic so you have to maintain another notebook with the remarks of that transactions.
2b. The electronic transaction record that you get every month contains same cryptic transaction details so its practically useless. If you complain, they ask you to get a statement from your bank (which I think is not very practical for NRIs)
2c. Any transition with respect to the banking system can be messy. It took about a month for them to instate NEFT system after previous transfer system was suspended by RBI, so your money was stuck in the bank unless you are still using old cheques system.
2d. Too many issues with their website, I always send them email with the complaints but they only thank me for suggestions with no single update in a year or so. (in contrast to Swedish bank where I made a small complaint and I saw change in the website in 3 weeks!!)
3. If you decide to open FCNR, exchange rates applied are hefty.

What I suggest, a tricky question. These are my experiences. Somebody may be ok with these cryptic transaction details but I am not, so choose the bank depending on your needs. I would recommend Axis Bank but have backup. They are not 100% reliable. Sad to say, afterall they are Indian bank..
I am looking for any other "better bank" (if such exists in India), suggestions are welcome.

Prasadp77 .....धन्स! सगळेच इतके सविस्तर लिहिले आहे कि काही विचारायला जागाच ठेवली नाही तुम्ही. पण तरी थोडा अजुन त्रास देते
Can u tel me anything abt HDFC and CITI bank.

I never had NRE HDFC account so no idea about it really.
I don't trust Citibank and their business policies so I keep them away no matter how many carrots of free facilities they offer me. I just maintain the stand, there is no free lunch in this world, so don't tell me that you are offering me something for free.

yes i belive too ..."Nothing in Life is Free"
दिलेल्या माहिती बाबत खुप खुप धन्यवाद !

प्रसाद्- मला तुमचे म्हणणे पटते, मोफ़त काहीच नाहे आहे आणि कोणतीही bank ही समाजसेवा करीत नाही, जर फ़ायदाच नसेल तर त्या कशा चालतील? प्रत्येकाच्या अडचणी, गरजा निर-निराळ्या असतात. मला १२-१५ किंवा क्वचित जास्त DD भारतात पाठवावे लागतात. मला कळत असते की सुरवातीला ३०-४० सेन्टस कमी मिळातात, पण मला सोय महत्वाची आहे (कोणालातरी २-३ तास bank मधे रांगेत उभे राहुन मग DD स्विकारून पोस्टात जाणे म्हणजे २-३ तासाचा खेळ आहे, आणि ते नेहेमीच शक्य नाही आहे).

@Prr, glad that my post helped.
@uday, totally agree and certainly accepting 30/40 cents beforehand is worth in your case but the only reason I made the above comment is because my friends and family have had just too many issues with them.

Last time I made post, I was pretty new with IDBI Bank's system but now I have got some idea so some update on IDBI Bank's experience.

I made few short term FDs with IDBI Bank.
- First of all, it takes more than 2 working days to open a FD (which ICICI Bank does it in few hours)
- As far as my experience and understanding goes, if you instruct the bank while opening a FD that the amount and the interest should be credited to certain account, they do it the very next day. In my case, it never took place, it kept showing on the website that I still hold that FD, past maturity date(?). I repeatedly wrote emails but no response. Finally, I wrote them and asked to extend that FD till certain date. It took 10 days for them to work on it. It was pretty frustrating to get this thing sorted out.
- They usually send you FD certificates/receipts once FD is opened. Out of the many FDs I have with them and I have received only one certificate/receipt so far, after 2 months of account opening. The answer to my email was, they will co-ordinate with the "concerned personnel" and send those to me. Now, I am going to wait and see how much time that takes.
- Frequent outage of their website.
- Their customer service email system is pretty messed up. They write you emails but most of these emails are not reply-able and it is not mentioned anywhere in that email so you reply this email and it keeps bouncing minimum 4 times before it "gives up". So every time you need to get in touch with them, you have to go through their contact us form on the website which has a really poor design.
- If you ask some question and the details are available on the website then you get a reply that its on the website (??) I would call this very unprofessional reply.
- EVERY email has a line to get in touch with them over the phone or contact nearest branch (How stupid? If that would be possible to fit in my schedule then would I not use brick and mortar bank?)

To cut long story short, I am not at all impressed by the service they have offered me so far and if this continues, this account of mine will be closed.

Can somebody tell me what are benifits of NRE account over NRO account except repatriability ? In other words I am looking for benifits in terms of interest rates / returns.
I have both NRE and NRO account with ICICI. Both have interest rate of 3.5 %. But if I transfer to NRO account, I can make Linked FD account with it and get 8% interest and this is not possible with NRE account. One fact is that, interest on that FD will be taxable but TDS is just 10.3% of interest.
For example, if I have Rs.100000 in NRE, I will get 3500 interest but with NRO I'll get 8000 and I'll have to pay Rs 824 as TDS which is fine. Does that 8000 also get counted in my gross earning and have to pay income tax on it ? Even if that's true and I have to pay max 30% of 8000 which is 2400 I am getting net interest of 4776 as compare to 3500 with NRE. Is that correct or I am missing something here ?

As far as my knowledge goes, you got it right but what you can do it, transfer the amount in NRE account (so that its repatriable) and then transfer it to retired parents' account and make FDs in such a way that the interest never becomes taxable. I know few individuals who do it but I don't really know if tax will be deducted from their FD's interest.

This is very interesting point actually, for conservative investors. If anybody has tried it and knows for sure, how this thing works, comment would be appreciated.

Ideally speaking you can't trf any amount to anybody. If you do, then you have to pay 30% gift tax over it as it will be treated as gift. as far as your parents go Income from interest need to be reported and due tax should be paid.
If you are not looking for repatriability, NRO account is good as you can make FD and earn more.

@ Kedar,
What if your parents are retired? Do they still pay income tax (on pension)? This question may sound foolish but I don't know teh answer.
Does this gift tax apply to even your wife, if she is in India and you are an NRI?

If interest is more than 10,000 then only TDS applies. I also checked with my friends and they did same thing what you have mentioned. You can keep 100000 each in your parents / blood relation's FD account and get around 8000 to 8500 interest for which there will not be TDS. And it works fine for them.
Also retired parents have to pay tax on their pension, maturity of FDs/ NSC etc etc

My brother borrowed 5,00,000 (~10K$) from mee for buying home in 2006. now he wants to return that money. how can i get that money in US? is there any service like remit2india where he can sed money from india to US?
if i open NRE/NRO account, can he submit money in that account & i can withdraw money
in US ? do i have to pay tax in india for that money?

There is NO capital account convertibility yet. Money invested in India (whether loan) or investment otherwise, the original amount can't be repatriated. In NRE account only inward remittance is allowed in dollars or foreign currency. (you can't deposit rupees). In NRO account you can deposit in rupees but you can't take dollars.

However the limits are getting pretty large on foreign currency conversions for travel outside India. I don't know the current limit but when you return from your india trip, you should be able to exchange some amount of rupees freely in dollars at that day's rate at airport. I have done myself several times for smaller amount ($300-$500) so you should be able to convert in few trips.

I am NOT a tax expert but I think that is not taxed in India if you are NRI (you can show the you were out of contry for more than certain days in last 5 years. Check rules for non residency. Just being outside India does not make you NRI for tax purpose unless you are out certain # of days).

Now the same rules that make you NRI for tax purpose in India, makes you resident in US for tax purpose (does not matter you have green card or not). So my suggestion would be aware of consequences for US tax laws. This money won't be taxed in US, but as per US laws anytime a US resident has 10k or more outside US in any country, they are required to declare (but not necessarily taxed) the accounts on US tax returns. Any interest etc on such account is taxed in US. IRS is getting more stricter on such accounts.
Here is note from IRS website,,id=184037,00.html

i have exchanged upto 1000$ at the airport.... but not 10,000$. & i am not planning to visit india now. is there any other way?


माझ नाव नेहा आहे, सध्या मी अमेरिकेत आहे, भारतात माझ आय सि आय सि आय आणि आय डी बी आय मध्ये रेसिडेन्ट अकाउन्ट आहेत, मला तिथे एफ डि ओपन करायची आहे, काही ऑप्शन आहे का?

I guess you can use western union money transfer. but to get exact 10K in USD, he'll have to send some extra money. also you should do it in breaks. not one shot.
another best way to do this would be, check with your friends if they are sending any USD's to India, if yes, you can give the INR directly within India to whomever they are sending the money and get USD's for that in US. no western union, no fee, no zig zig.
your brother will have to spend zero rs to send money from india, your friends relatives will get more INR' and you'll get more USDs.
anyway if I were you, I would have put my question as, is there any way to transfer money from India to US, I had lent someone 10K USD in India and now we are seeking on options about how to covert INR in USD.

आपल्या पैकी कोणि FCNR Rupee Max or FCNR Rupee Plus Plan मधे गुणतवणूक केली आहे का?

1. Open FCNR Account
2. Open Ruppe Max deposit which is known as forward rate rupee deposit for 1-5 years tenure.

This works like a certificate of deposit with an advantage of getting extra rupees/$ conversaion rate + around 4.5% APY.

कोणाला ह्या बद्दल अनुभव आहे का?


:)................ उत्पन्न हे जर व्याजाच्या स्वरूपात असेल, तर त्याला स्लॅब प्रमाणे टॅक्स रेट नसतो, तर सरसकट १० % प्लस अधिभार इतकाच असतो... म्हणून तर १०% ने टीडीएस काटतात.. नाही तर तुमचे इन्कम स्लॅब विचारून ३० % नसते का कापले?

एन आर आय बँकिंग बद्दल मला काही शंका आहेत..

१. NRE आणि NRO अकाउंटमध्ये काय फरक असतो ?

२. परदेशातून पैसे आपल्याच खात्यावर जमा करण्यासाठी NRE किंवा NRO अकाउंटमध्येच ट्रान्स्फर करणे आवश्यक असते का?

३. आपल्या पूर्वी ओपन केलेल्या सेविंग अकाउंटमध्ये ( जे NRE/ NRO नाही) आपण परदेशातून पैसे डायरेक्ट ट्रान्स्फर करु शकतो का?

४. मग जर नॉर्मल अकाउंटमध्ये पैसे डायरेक्ट ट्रान्स्फर करता येतात, तर NRE/ NRO अकाउंट असण्यात विशेष फायदा काय आहे?

मी विविध बॅन्कांच्या साइट्स पाहिल्या. पण त्यावर अकाउंट ओपन कसे करावे, मिनिमम बॅलन्स, अशी माहिती आहे... मला या प्रश्नांबाबत कोणी मार्गदर्शन करू शकेल का?

In NRE a/c, the funds are stored in Indian rupees. Funds in rupees can be transferred to any currency (dollars, pounds etc.) as and when required. In NRO a/c funds are stored in Rs and cannot be transferred back to a foreing currency.

It is not mandatory to transfer money from aborad in NRE/NRO a/c. You can directly transfer foreign funds in your own regular savings a/c in India.

Except first point above, there are no special benefits of NRE/NRO a/c.

आयला, हा बीबी पहिल्यान्दाच बघितला! छान माहिती! (अर्थात मला [सद्ध्यातरि/आजतरी] निरुपयोगी!)
बर, ते राहुदे, पण पोपटाच्या बीबीवर इन्ग्रजीवापराबद्दल धाडी घालणार्‍यान्च्या नजरेतून हा बीबी कसा काय बरे सुटला? Wink Proud

शहाण्याने जसे कोर्टाचि पायरी चढू नये म्हणतात तसेच सीटी ब्यान्केची पायरी चढू नये या मताचा मी आहे! असन्ख्य कारणे, पण तो या बीबीचा विषय नाही!

मी गेली १५ वर्षे HSBC चा NRI customer आहे. मला आजतागायत ह्या बँकेकडून काही प्रॉब्लेम आलेला नाही.अर्थात हे माझं वैयक्तिक मत.
कोणाला Ministry of External Affairs ने प्रकाशित केलेलं NRI Handbook हवं असल्यास मला संपर्क करा.

लिम्बू जी, अश्विनी मामी CITI Bank चे तुम्हाला चांगले अनुभव आले नाही अस वाटतय मी CITI Bank NRI Account ऊघडायचा ईचार करत व्हते नको ऊघडु का CITI Bank च खात !!!

HDFC NRI Account बद्दल माहिती हवी होती, HDFC च्या साईट वर त्यांचा USA Cutomer Care or Contact Number दिसला नाही.

HDFC NRI अकाऊंट उघडल्यावर भविष्यात जर काही शंका असेल, माहिती हवी असेल तर भारतात कॉल करावा लागेल हे सोयीस्कर आहे का?...... कुणी HDFC NRI Account, Online उघडल आहे का? तुमचा अनुभव शेअर करा प्लीज Happy

माझे सिटीबँक चे एन आरी अकाउंट होते. एकदा मला डेबिट कार्ड रीन्यु करुन हवे होते तेव्हा त्यानी २ महिने घेतले, त्याना फोन करुन करुन माझी सहनशक्ती संपली आणि मी ते बंद करुन टाकले.
पण मी नेट वर पाहिले सिटी, आयसीआयसीआय इ सगळ्यांची कस्टमर सर्विस दयनीय आहे असे वाचलेय.