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.
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.