Banking beyond borders: Can US citizens open accounts in India?

Exploring banking options for foreign nationals, from NRE, NRO and FCNR accounts to Gift City investments

- Sashind Ningthoukhongjam

When Ram learnt that his parents were attempting to transfer ₹10 lakh to his bank account in the US after selling a plot of land in India, he was not particularly pleased. The computer engineer working in the US knew that the simple gesture could turn into a logistical nightmare. Transferring money from India to a foreign bank account can be cumbersome. Additionally, if the payment exceeds ₹7 lakh TCS or tax collected at source would be deducted, which can be claimed later.

Ram felt that the whole process was too complicated for his retired parents to handle. Fortunately, a banker friend, also an overseas citizen of India (OCI) having a foreign passport like Ram gave a solution. He had faced a similar situation recently but managed to side-step the hurdles of filling out required forms or TCS deductions with his non-resident ordinary (NRO) bank account in India.

Reserve Bank of India (RBI) allows non-resident Indians (NRIs), overseas citizens of India (OCIs) and persons of Indian origin (PIOs) to open bank accounts in India, in the form of NRO, non-resident external (NRE), or foreign currency non-resident (FCNR) accounts. So, instead of transferring money to his US bank account, Ram's friend parked it in his NRO account.

An NRO account works like a regular account for depositing income, capital gains, or gifts earned in India. With an NRO account, one need not fill those forms, consult a chartered accountant (CA), or even pay TCS on it. It's much like transferring funds to any normal bank account in India.