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NRI |
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Q. Who qualifies as a
Non-Resident Indian (NRI)?
A. A person who has gone out of India or who stays outside India for any of
the following:
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Taking up employment
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Business or vocation
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Any other purpose, in such
circumstances as would indicate his intention to stay outside India for an
uncertain period
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Indian citizens working
abroad on assignments with foreign Governments/Government agencies or
international/regional agencies like the UNO, IMF, World Bank etc.
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Officials of Central and
State governments and Public Sector Undertakings deputed abroad on temporary
assignments or posted to a Branch/Office (including diplomatic missions)
abroad
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Indians settled abroad
permanently
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Indians gone abroad on
immigration
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Crew members of Indian
nationality or Indian origin employed by foreign airlines/shipping
companies, if they are based at foreign ports and reside abroad
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Non-Resident Indians become
Indian residents only when they come back to India for employment or for
carrying-on any business in India or vocation or for any other purpose
indicating an indefinite period of stay in India.
They are not regarded as Resident Indians during their short visits to India on
holiday, leave etc.
In terms of Section 2(v) of FEMA, 1999, a 'person resident in India' means –
a person residing in India for more than one hundred and eighty-two days during
the course of the preceding financial year but does not include –
(A) a person who has gone out of India or who stays outside India, in either
case -
for or on taking up employment outside India, or
for carrying on outside India a business or vocation outside India, or
for any other purpose, in such circumstances as would indicate his intention to
stay outside India for an uncertain period;
(B) a person who has come to or stays in India, in either case, otherwise than –
for or on taking up employment in India, or
for carrying on in India a business or vocation in India, or
for any other purpose, in such circumstances as would indicate his intention to
stay in India for an uncertain period;
any person or body corporate registered or incorporated in India,
an office, branch or agency in India owned or controlled by a person resident
outside India,
an office, branch or agency outside India owned or controlled by a person
resident in India; |
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Q. Who is a person of Indian
origin?
A. You are a person of Indian origin if have at any time held an Indian
passport, or either of your parents or any of your grandparents were citizens of
India by virtue of the Constitution of India or the Citizenship Act, 1955 or are
the spouse of an Indian citizen or of a person of Indian origin (other than of
Pakistan or Bangladesh) and are now a foreign citizen (other than of Pakistan or
Bangladesh). |
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Q. What is an Overseas
Corporate Body (OCB)?
A. Overseas Corporate Bodies are predominantly owned by individuals of
Indian nationality or origin, residing outside India, and are inclusive of
overseas companies, partnership firms, societies and other corporate bodies
which are owned directly or indirectly to the extent of at least 60% by NRIs.
OCBs also include overseas trusts in which at least 60% of the beneficial
interest is irrevocably held by such persons. |
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Q. Are OCBs required to
produce any certificate regarding ownership/beneficial interest in them by NRIs?
A. Yes. In order to establish that the ownership interest or beneficial
interest in any OCB is held by individuals of Indian nationality / origin, they
are required to furnish a certificate from an overseas auditor / chartered
account / certified public accountant in a 'Form OAC' where the ownership
beneficial interest is held directly by NRIs. The same formalities apply in case
the ownership beneficial interest is held indirectly by NRIs. Here they require
to submit 'Form OAC 1'. |
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Q. What are the various investment opportunities
in India available to NRIs?
A. If you are an NRI, the following investment opportunities are open to
you: |
- Maintenance of bank accounts in India
- Investment in securities/shares and deposits
of Indian firms/companies
- Investment in immovable property in India
- Investment in Mutual Funds in India
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Q. What types of accounts can I open?
A. As an NRI, you can open the following types of accounts: |
- Non-Resident External (NRE)
- Non-Resident Ordinary (NRO)
- Foreign Currency Non-Resident (FCNR)
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Q. In what currency can these accounts be
maintained?
A. As an NRI, you can open the following types of accounts: |
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Non-Resident Ordinary (NRO)
Under this scheme you can open Rupee Checking Accounts, namely Rupee Savings
Account or Rupee Current Account, and Rupee Fixed Deposit accounts. This
account will be maintained in Indian Rupees. Credits to your NRO account are
restricted to legitimate dues in India and foreign inward remittances. Only
the interest on these accounts is repatriable.Income Tax of 30% is
applicable on the Interest Earned.
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Non-Resident External (NRE)
Under this scheme you can open Rupee Checking Accounts, namely Savings
Account and Current Account, and Rupee Fixed Deposit accounts. This account
will be maintained in Indian Rupees.
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Foreign Currency
Non-Resident (FCNR)
Under this scheme you can open Fixed Deposit Accounts in USD, GBP, EURO, JPY,
AUD & CAD
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Q. Can I open these
accounts with any Bank in India?
A. No. Only those banks holding an Authorised Dealers' licence or banks
specially authorised in this regard by the Reserve Bank of India are permitted
to open these accounts on behalf of NRIs.
You can open an account with HDFC Bank as we have an Authorised Dealer status. |
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Q. Can I open these accounts
in any convertible currency?
A. Yes, you can remit funds for opening the account in any convertible
currency. However, in the case of NRO / NRE, the remitted funds will be
converted into Indian Rupees at the spot exchange rate. These accounts will be
maintained in Rupees.
In the case of FCNR accounts, you can remit the funds in any convertible
currency. These accounts will be maintained in the currency of your choice i.e.
USD, GBP, EURO, JPY, AUD and CAD. |
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Q. Can I transfer funds from my existing NRE/FCNR
Accounts to open NRO Accounts?
A. Yes, you can. |
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Q. If I'm visiting India, can
I use Travellers Cheques or Currency to open an account or credit my existing
NRE Account?
A. Travellers Cheques can be used to credit/open the account. NRIs
bringing Foreign Currency Notes & Travellers Cheques will have to submit a
Currency Declaration Form (CDF) to the customs authorities on arrival in India
if the foreign currency notes exceed USD 5,000/- or Travellers Cheques and notes
exceed USD 10,000/-. You must produce the CDF for endorsement by the bank when
you submit the money for opening/credit to an account. |
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Q. What is the frequency of Interest
payment on my accounts?
A. NRO - Savings Account
Half YearlyNRO - Term Deposit Account
Quarterly
NRE - Savings Account
Half Yearly
NRE - Term Deposit Account
Quarterly
FCNR - Term Deposit Account
Half-yearly
If you choose the reinvestment scheme, Principal & Interest will be payable on
maturity. However, you get the advantage of a higher effective yield on
maturity. |
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Q. Under which accounts can I
avail of a cheque book / ATM card facility?
A. You can avail of a cheque book / ATM Card facility with an NRO - Savings
Account & Current Account as well as anNRE - Savings Account & Current Account. |
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Q. What are the admissible debits & credits to
NRO Accounts? |
- Debits are allowed freely
- Funds representing legitimate dues of the account holder from local
sources and proceeds of remittances received from abroad through normal
banking channels are credited freely.
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Q. What are the permissible debits/credits to the
NRE/FCNR Accounts? |
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Debits are allowed freely,
however debits for investments in Shares/securities/commercial paper of
Indian companies or for purchase or immovable property in India should be
covered by general/specific permission of RBI. For further details on
investment in Shares click here
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Credits to an account,
through funds from a local source would be permissible only if the funds are
repatriable
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Also, proceeds of remittances
received from abroad in freely convertible currency through normal banking
channels may be credited freely
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Traveller's Cheques or
foreign currency tendered by the account holder during his temporary visit
to India
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Interest / Maturity Proceeds
of Government securities including National Savings Certificates, dividends
of Unit Trust of India, provided these securities were purchased out of
funds from NRE / FCNR Accounts
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Q. Can I give a Power of Attorney
to a Resident Indian to operate my Non-Resident Accounts? |
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A Power of
Attorney is given only for operating the account & not for
opening the account. Further, the operations are restricted
only for making legitimate local payments.
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The Power of
Attorney can make payments for the purpose of making
investments on behalf of the NRI.
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Under no
circumstance is the Power of Attorney holder allowed to
repatriate the funds abroad or make payments or gifts on
behalf of the non-resident account holder.
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Q. Can Power
of Attorney Holders credit proceeds of foreign currency notes /
bank notes & travellers cheques to the NRE Accounts?
A. No.
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Q. What is the
exchange risk that I'm exposed to under the different accounts?
A. Since accounts under the NRE scheme are held in Rupees,
you will bear the exchange risk if the Rupee depreciates and if
you want to make an outward remittance.
In the case of FCNR schemes , this account is maintained in the
currency of your choice (USD, GBP, EURO, JPY, AUD & CAD),
therefore you will not bear any exchange risk.
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Q. Can I repatriate funds in my
NRI Account? |
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Type of
Account |
Repatriation of Principal |
Repat of
Interest |
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NRO |
As per AP Dir Cir number 67
dated 13th Jan 2003, authorised dealers are now
permitted to remit upto USD 1 mio out of the legitimate
balances held in NRO accounts, sale proceeds of assets ,
on production of an undertaking and C A certificate by
the person making the remittance (in the formats
prescribed by RBI). The above facility shall be
effective upto June 30th 2003 and is subject to review
thereafter. |
Interest earned on
investments made on non repatriation basis, after
payment of taxes as applicable can be repatriated |
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NRE |
Yes |
Yes |
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FCNR |
Yes |
Yes |
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Q. Can I open a joint account? |
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Type of
Account |
Joint
Account with Resident Indians |
Joint
Account with Non-Resident Indians |
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NRO |
Yes |
Yes |
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NRE |
No |
Yes |
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FCNR |
No |
Yes |
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Q. What taxes may I be liable to
pay if I have an NRI Account? |
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Type of
Account |
Income
Tax |
Gift Tax |
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NRO |
Yes (Flat 30%) |
No |
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NRE |
No |
No |
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FCNR |
No |
No |
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Q. If I hold
any NRI account with a Resident Indian, will the Resident Indian
be exposed to tax obligations?
A. No. The Resident Indian is not exposed to any tax
obligations. |
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Q. Can I nominate an Indian
Resident or an NRI?
A. Yes, you can nominate an NRI or an Indian Resident
subject to the following conditions: |
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Funds held in
the NRO cannot be repatriated by the non-resident nominee &
will be credited to the nominee's NRO account. Application
from a resident nominee for remittance of funds outside
India for meeting the liabilities of any of the deceased
Account Holders or for similar purposes should be forwarded
to the Rerserve Bank of India
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In the case
of a resident nominee, the funds held in the NRE/FCNR
account can be repatriated subject to prior specific RBI
permission
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Q. Can I avail
of loans against my non-resident deposit accounts?
A. Yes. You can avail of loans against your NRO/NRE/FCNR
Deposits, the loan/overdraft can be used for personal purposes
or for carrying on Business activites other than 1) Relending 2)
Agricultural/Plantation activities 3) Real Estate Business |
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Q. Can I
transfer funds between NRE Accounts?
A. Yes. Transfer of funds from NRE Accounts maintained by
two different persons may be allowed for bonafide personal
purposes such as personal expenses, education of children, and
gifts. |
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Q. Can I break my deposit
before the maturity period?
A. Yes, you can break your deposit before the maturity period. NRE Deposits
booked on or after 1st May 2003 will qualify for interest only if they have run
for a minimum period of 12 months. NRO Deposits would qualify for interest only
if they have run for a period of 15 days, FCNR deposits will qualify for
interest only if they have run for a 1 year period. |
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Q. Can my deposits with the
bank be automatically renewed on maturity?
A. If the customer leaves renewal instructions, the deposit will be renewed
at maturity in accordance with the instructions. In the absence of any
instructions, we will roll over principal & interest for the same period at the
rates prevailing on the date of maturity. |
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Q. How do I open an account
with your Bank?
A. Please click here for all the information you will need to open an
account. |
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Q. Can the funds in my NRI
accounts be used for payments for/ towards air fare to or from India for the
account holder and/or his dependents?
A. Yes. Funds in your NRO/NRE Accounts can be used for this purpose. |
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Q. Are there any facilities available for
returning Indians?
A. Returning Indians can avail of the following facilities: |
- Maintenance of assets abroad: An NRI, who
has stayed abroad continuously for at least one year, is permitted to
maintain his investments in bank deposits, shares, securities, business and
immovable properties abroad.
- Eligibility to open a Resident Foreign
Currency Account (RFC): NRIs returning permanently, after a continuous stay
of minimum one year abroad, can open Resident Foreign Currency Accounts with
banks in India.
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Q. What is the Resident
Foreign Currency Account Scheme?
A. This is a scheme permitting persons of Indian nationality or origin who
have returned to India for permanent settlement (Returning Indians) after being
resident outside India for a continuous period of not less than one year, to
open foreign currency accounts against the proceeds held in NRE/FCNR accounts of
Funds remitted from abroad. |
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Q. What types of accounts can
I open under RFC scheme?
A. You can open Current, Savings and Fixed Deposit Accounts under the RFC
scheme. However you will not be given a cheque book facility, on the RFC
Savings/Current Account |
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Q. In which currency can I
maintain RFC accounts?
A. RFC accounts can be maintained in any permitted currency such as USD, GBP,
JPY, EURO etc. |
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Q. What is the frequency on
interest payment on RFC Savings & Deposit Accounts?
A. The frequency of interest payments on RFC Savings & Deposit Accounts is
quarterly. |
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Q. Is there a
nomination facility available for RFC Accounts?
A. For Non-Resident nominees, funds can be remitted abroad
to the extent of their entitlement if on the date of the account
holder's death such nominees are residing outside India. If the
nominee is residing in India on the date of death of the account
holder, then the equivalent amount will be paid to him in Indian
Rupees. |
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Q. What funds can be credited to
RFC Accounts? |
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The entire
amount of foreign exchange assets acquired or held while he
was resident outside India. This could be in the form of
deposits in banks outside India, investments in foreign
currency, shares and securities or immovable properties
situated outside India or investments in business etc.
outside India. It includes foreign exchange earnings through
employment, business or vocation outside India commenced by
the NRI while he was resident outside India.
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Also, all
balances standing to the credit of their NRE/FCNR Accounts
at the time of return can be credited to RFC Accounts.
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NRIs bringing
Foreign Currency Notes & Traveller's Cheques will have to
submit a Currency Declaration Form (CDF) to the customs
authorities on arrival in India if the foreign currency
notes exceed USD 5,000/- or Traveller's Cheques and notes
exceed USD 10,000/-. You must produce the Currency
Declaration Form for endorsement by the bank when you submit
the money for opening/credit to an account.
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Q. Can income
received from my overseas assets in the form of dividends etc,
or sale of proceeds of such assets be credited to RFC Accounts?
A. Yes
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Q. Can my
pension from abroad be credited to my RFC Account?
A. Yes |
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Q. Can funds
held in the RFC Accounts be remitted abroad?
A. Funds in RFC Accounts can be remitted abroad for any
bonafide purpose of the account holder. |
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Q. Can funds
in the RFC Accounts be utilised for local payments?
A. Yes. The amount will be converted and credited to the
customers resident salary a/c. |
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Q. Can NRIs
invest their funds in government securities or units of Unit
Trust of India?
A.Yes. |
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Q. Are NRIs
allowed to invest in Public Provident Fund ie PPF, National
Saving Certificates(NSCs) and Post Office Savings Bank?
A. No. NRIs are not permitted to invest in PPF, NSCs and
Post Office Savings Schemes.
However
investments made by a resident (in PPF, NSCs or Post Office
Savings scheme),who subsequently becomes NRI may continue to be
held upto its maturity on a non-repatriation basis. |
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Q. Is
permission of Reserve Bank required for NRIs to invest in
proprietary/partnership concerns on Non-Repatriation basis?
A. No |
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Q. Is
permission of Reserve Bank required for making investments in
new issues of shares/debentures of Indian companies on Non-Repatriable
basis?
A. No |
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Q. Can NRIs
make investment in non-convertible debentures of Indian
companies?
A. Yes |
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Q. Can NRIs
purchase shares of Indian companies through a private
arrangement?
A. Yes. However, the company offering shares for
subscription must seek RBI permission to allot shares through a
private arrangement to the NRI. |
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Q. Can an NRI
invest in immovable property?
A. Non-resident Indian citizens can freely purchase and sell
residential and commercial properties in India. Foreign citizens
need to obtain RBI's permission for the same. However, a foreign
citizen of Indian origin need not obtain RBI's permission for
purchasing and selling residential and commercial properties
(other than agricultural/plantation land and farm houses) for
bonafide purposes, provided these purchases are met out of
foreign exchange funds. |
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Q. Can an NRI
import gold or silver?
A. NRIs can bring gold up to 10 kg. And silver upto 100 kg
into India once in 6 months, as part of their personal baggage,
provided they have stayed abroad for a continuous period of 6
months. The gold may be brought in any form, (except as
ornaments studded with stones and pearls). The NRIs will have to
pay customs duty in foreign exchange at the rate of Rs.40 per gm
of gold and Rs.500 per kg of silver. The gold and silver can be
sold to residents, but the sale proceeds will have to be routed
through the NRO Account of the seller. |
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Q. Can an NRI
invest in Mutual Funds?
A. Yes, an NRI can invest in Mutual Funds. However in the
case of Money Market Mutual Funds, the investments will be on a
non-repatriable basis. |
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Q. Do NRIs
need RBI permission to invest in Mutual Funds?
A. No , NRIs can invest & redeem units in Mutual Funds
without prior permission from RBI. Contact HDFC Bank for further
details. |
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