October 24, 2021

Can an NRI open a joint account with a resident of India?

Aug 19, 2021

Non-Resident Indians are those persons who are Indian citizens but are living abroad due to various reasons. Most NRIs have families or relatives back home who partly manage their financial affairs in India. For example, if Mr Khanna is employed in Dubai, but his wife and children are living in India, then his wife will be in a better position to manage finances on the Indian side like paying or receiving rent, withdrawing funds, operating bank accounts etc.

Therefore, the question arises, is it possible for an NRI like Mr Khanna to hold a joint account in India with an Indian resident, who in this case is his wife? Up until 2011, this was not possible.

However, now an NRI can open joint residential savings account with an Indian resident on an ‘either-or survivor’ basis, under certain conditions. A joint account with an NRI can also be an NRO account.

As far as an NRI holding an Indian bank account on his own is concerned, it is still not allowed and attracts a penalty.

Joint Residential Savings Account with an NRI

So how does a joint account with an NRI and resident Indian work? Given below are the conditions in which this is possible.

– A joint residential savings account can be opened between an NRI and an Indian resident, provided that the Indian resident is a relative. A relative, in this case, can mean parents, siblings, siblings’ spouses, children, own spouse, children’s spouses, grandparents, grandchildren and spouses of grandchildren.

– All the rules and regulations applicable to a normal savings bank account in India will be applicable to such a joint account as well.

– The bank keeps all the relevant documentation with them, including a record for the need of a joint account. A signed declaration is also taken from the NRI indicating that they will not use the funds in the account in violation of the FEMA Act and will be responsible for the repercussions in case a violation does occur.

– The NRI account holder cannot deposit any money in the form of cash, cheque, remittances or direct credit into such an account.

– The money from this joint account is not repatriable, which means it cannot be transferred outside India.

– The resident Indian will be the primary account holder of the joint account. The NRI will remain the secondary holder.

– Such a joint account can be used to make payments by the resident account holder.

– In case the resident account holder passes away, then the NRI will become the sole holder of the account, but the account will be converted into an NRO account.

Joint NRO with an NRI

An NRI can also jointly hold an NRO or Non-Resident Ordinary account with a resident in India. However, such an account can only be opened on the ‘former or survivor’ basis.

Final Word

Thus, an NRI can hold a joint account along with a resident relative if the above conditions are met. This can either be a normal residential savings account or an NRO account as well. If an NRI wishes to hold an account in India as a sole account holder, then there are other options like an NRO account, NRE account or an FCNR account.

To open a joint savings account with an NRI, the account holders can visit the concerned bank along with relevant documentation and declaration as required by the bank and follow the bank’s protocol.

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All about PMAY (Pradhan Mantri Awas Yojana) – Key Benefits & Features

Aug 19, 2021

Dedicated to providing housing for Indians in both rural and urban areas, the Pradhan Mantri Awas Yojana (PMAY) was launched by Prime Minister Narendra Modi in June 2015. Pradhan Mantri Awas Yojana is a housing scheme where the beneficiary can get a home loan interest rate subsidy if he/she wishes to extend, construct or purchase a house. This credit-linked subsidy scheme is aimed at providing affordable housing for all by 2022. In case you are planning to buy a home, it is important to know the features and benefits of the PMAY scheme in order to boost your investment decision.

Features of PMAY

  • Pradhan Mantri Awas Yojana is categorised into two parts – Pradhan Mantri Awas Yojana (Urban) and Pradhan Mantri Awas Yojana (Gramin)
  • To avail the benefit under this scheme, the beneficiary should not own a ‘pucca’ or concrete house.
  • The beneficiary family would include husband, wife and unmarried sons and daughters.
  • The applicant family would have to provide their Aadhaar number while applying for the home loan under this scheme to avoid duplication.
  • The applicant can apply for a home loan under PMAY through any lending institution like banks, non-banking financial companies, rural banks, housing financing companies, etc.
  • The subsidy available under this scheme is up to 6.50% of the loan amount for a tenure of up to 20 years.
  • The benefit of the scheme can be availed across all urban areas in 4041 statutory towns in India.
  • Under this scheme, the houses are being constructed using eco-friendly raw materials. Moreover, they are designed to withstand natural calamities.
  • The interest subsidy is available for people belonging to categories of Economically Weaker Sections (EWS), Lower Income Group (LIG) and Middle Income Group (MIG – I & II).

The credit-linked subsidy scheme for the different categories is tabulated below –

Category Annual income Rate of interest subsidy Maximum loan amount Carpet Area of the house
Economically Weaker Sections (EWS) Rs 3 Lakh 6.50% Rs 6 lakh 30 Sq. Mtr.
Lower Income Group(LIG) Rs 3 lakh – 6 lakh 6.50% Rs 6 lakh 60 Sq. Mtr.
Middle Income Group –I (MIG) Rs 6 lakh –  12 lakh 4% Rs 9 lakh 160 Sq. Mtr
Middle Income Group – II Rs. 9 lakh – Rs 18 lakh 3% Rs 12 lakh 200 Sq. Mtr.

Benefits of PMAY

  • Women empowerment

PMAY scheme aims to help women participate in the financial decision-making of the family. To avail this scheme, it is mandatory for a family to have a woman as the owner or co-owner of the house.

  • Housing for all

The housing scheme is for people living in both rural and urban areas of the country. Moreover, there are preferential provisions for salaried women, disabled individuals, minorities like scheduled castes and scheduled tribes, widows, transgender people etc. In addition, if you are a senior citizen you can also expect to get ground floor accommodation under this scheme. PMAY also aims at accelerating slum rehabilitation by providing affordable housing and eco-friendly homes to first time home buyers.

PMAY is a positive approach of the Government to provide affordable housing for all. It will not only help people with low purchasing capacity to live with dignity in their own homes, but also contribute to slum rehabilitation. If you have been planning to buy a house, this could be the best time to do so under the PMAY scheme. Make sure to check your eligibility for PMAY and apply for a home loan today!

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