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Deposits between a person resident in India and a person resident outside India

Reserve Bank of India (RBI) has updated the regulations on deposits between a person resident in India and a person resident outside India.

What are the restrictions on deposits between a person resident in India and a person resident outside India?

No person resident in India shall accept any deposit from, or make any deposit with, a person resident outside India. However, the following deposits are exempted –

  • Deposits held in rupee accounts maintained by foreign diplomatic missions and diplomatic personnel and their family members in India with an authorised dealer.
  • Deposits held by diplomatic missions and diplomatic personnel in special rupee accounts namely Diplomatic Bond Stores Account to facilitate purchases of bonded stocks from firms and companies who have been granted special facilities by customs authorities for import of stores into bond. The funds in the account may be repatriated outside India without the approval of the RBI.
  • Deposits held in accounts maintained in foreign currency by diplomatic missions, diplomatic personnel and non-diplomatic staff, who are the nationals of the concerned foreign countries and hold official passport of foreign embassies in India. The account may be held in the form of current or term deposit account, and in the case of diplomatic personnel and non-diplomatic staff, may also be held in the form of savings account. The funds in the account may be repatriated outside India without the approval of the RBI.
  • Deposits held in accounts maintained in rupees with an authorised dealer by persons resident in Nepal and Bhutan.
  • Deposits held in accounts maintained with an authorised dealer by any multilateral organisation and its subsidiary / affiliate bodies and officials in India of such multilateral organisations, of which India is a member nation.

What are the regulations on acceptance of deposits by an authorised dealer / authorised bank from persons resident outside India?

  • An authorised dealer in India may accept deposits under –
    • Non-Resident (External) Account Scheme (NRE Account) 
    • Foreign Currency (Non-Resident) Account Banks Scheme (FCNR(B) Account) 
    • Non-Resident (Ordinary) Account Scheme (NRO Account) 
  • Deposits under NRE and NRO Account Schemes may also be accepted by an authorised bank, i.e. a bank including a co-operative bank (other than an authorised dealer) authorised by the RBI to maintain an account of a person resident outside India.
  • Deposits under FCNR(B) Account Schemes may also be accepted by a Regional Rural Bank.
  • Any person resident outside India may open a Special Non-Resident Rupee (SNRR) Account with an authorised dealer in India or its branch outside India [including in an International Financial Services Centre (IFSC) in India].
  • Resident or non-resident acquirers may open an Escrow Account with authorised dealers in India.

What are the features of NRE, FCNR(B), NRO, SNRR and Escrow Accounts?

NRO Account NRE Account FCNR(B) Account SNRR Account Escrow Account
Any person resident outside India may open the account for putting through bona fide transactions in rupees.
Individuals / entities of Pakistan nationality / origin and entities of Bangladesh origin require the prior approval of the RBI.
A citizen of Bangladesh / Pakistan belonging to minority communities in those countries i.e. Hindus, Sikhs, Buddhists, Jains, Parsis and Christians residing in India and who has been granted Long Term Visa (LTV) or whose application for LTV is under consideration, can open only one NRO account. 		Non-resident Indians (NRIs) and Persons of Indian Origin (PIOs) may open the account.
Individuals / entities of Pakistan and Bangladesh shall require prior approval of the RBI. 		Any person resident outside India may open the account for putting through permissible current and capital account transactions with a person resident in India and for putting through any bona fide transaction with a person resident outside India.
Opening of SNRR accounts by nationals of, and entities incorporated in, Pakistan and Bangladesh requires prior approval of the RBI. 		Resident and non-resident acquirers may open the account.
In Indian Rupees Any permitted currency i.e. a foreign currency which is freely convertible In Indian Rupees
Savings, Current, Recurring, Fixed Deposit Term Deposit only Non-interest bearing
Not repatriable except for all current income.
Balances up to USD 1 million per financial year can be remitted. 		Repatriable

What are the other regulations?

  • A company registered under the Companies Act, 2013 or a body corporate created under an Act of Parliament or State Legislature shall not accept deposits on repatriation basis from an NRI or a PIO. The company may, however, renew the deposits which had been accepted on repatriation basis from an NRI or a PIO.
  • A company registered under the Companies Act, 2013 or a body corporate, a proprietary concern or a firm in India may accept deposits from an NRI or a PIO on non-repatriation basis.
  • A shipping or airline company incorporated outside India may open a foreign currency account with an authorised dealer for meeting the local expenses in India.
  • An authorised dealer in India may allow unincorporated joint ventures (UJV) of foreign companies / entities with Indian entities (executing a contract in India) to open a non-interest-bearing foreign currency account and a SNRR account for undertaking transactions in the ordinary course of its business. The tenure of the account shall be concurrent with the tenure of the contract / period of operation of the UJV. 
  • An authorised dealer in India, with the prior approval of the RBI, may open an account in foreign currency in the name of a person resident outside India for adjustment of value of goods imported into India against the value of goods exported from India in terms of an arrangement voluntarily entered into by such person with a person resident in India.
  • An authorised dealer in India may allow a Foreign Portfolio Investor and a Foreign Venture Capital Investor to open a non-interest-bearing foreign currency account for making investments.
  • An authorised dealer in India may allow a person resident outside India to open an interest-bearing account in Indian Rupees and / or foreign currency for posting and collecting margins in India, for a permitted derivative contract entered into by such person.
  • Authorised dealers may provide nomination facility in respect of the deposits / accounts maintained by individual account holders.
  • The transfer of funds for all bona fide transactions between repatriable rupee accounts is permitted.


References

Reserve Bank of India. (2016, April 01). 'Foreign Exchange Management (Deposit) Regulations, 2016'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=10325&Mode=0

Reserve Bank of India. (2025, January 16). 'FAQ - Accounts in India by Non-residents'. Retrieved from https://rbi.org.in/Scripts/FAQDisplay.aspx?Id=52

Reserve Bank of India. (2026, June 18). 'Foreign Exchange Management (Deposit) (Sixth Amendment) Regulations, 2026'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13553&Mode=0


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