NRO account denotes Non Resident (Ordinary) Account. This account allows the non-resident Indian (NRI) to fulfill their banking needs while staying outside India. Such accounts enable the account holder to receive funds from within India as well as outside India alike.
No other type of account allows the NRI to receive the funds in Indian currency except the NRO account. Thus, such accounts are suitable for the NRIs when they also need to receive regular funds from India. Such sources of income can be dividend income, investment income, rental income, etc. which can be received through normal banking channels in NRO accounts. As such, if one is holding equity investments within India, one must take care to provide the NRO account as the default bank account for receiving dividend credits.
As far as the utilization of the account balance is concerned, there are no restrictions in respect of withdrawing funds within India. If one wishes to repatriate funds outside India, the principal funds can be transferred only up to specified limits. However, the interest earned on NRO accounts can be freely repatriated outside India. NRO accounts allow flexibility in terms of allowing joint operations with a resident Indian, unlike NRE and FCNR (B) accounts, which allow joint operations only with another NRI. As such, one may hold and operate an NRO account in joint ownership with his/ her parents and dependents in India while staying abroad.
How to open an NRO account?
You can open an NRO account by providing all the details to the bank in the application form to be submitted online. Once the details have been submitted, including the mobile number along with the convenient time to contact, you will receive a call from the customer care representative within 1-2 working days. Such a representative will arrange to complete all the required formalities, including funding details, undertaking the KYC compliance, etc.
One can also convert existing regular savings account into an NRO account if the residential status has later changed into a non-resident. For such conversion, one needs to submit an application with the bank, stating the facts, including a change of residential status. The bank may also require the copy of passport, the details of new residential address outside India along with documentary evidence for that to undertake fresh KYC compliance. In the case of a joint NRO account, the KYC documents would be required for both the applicants.
How can one transfer funds to the NRO account?
NRO accounts are flexible in terms of accepting foreign currency remittances as well as accepting rupee transactions. As such, one can transfer funds into an NRO account from any foreign bank account or any bank account within India. Further, the maturity proceeds of NRE deposits, NRO deposits, and FCNR (B) accounts can also be transferred to NRO account.
With the flexibility of joint operations and receiving the rupee credits, NRIs can apply to open NRO account conveniently as well as digitally.