A ‘Person of Indian Origin (PIO)’ is a person resident outside India who is a citizen of any country other than Bangladesh or Pakistan or such other country as may be specified by the Central Government, satisfying the following conditions:

1. Who was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955); or

2. Who belonged to a territory that became part of India after the 15th day of August, 1947; or

3. Who is a child or a grandchild or a great grandchild of a citizen of India or of a person referred to in clause (a) or (b); or

4. Who is a spouse of foreign origin of a citizen of India or spouse of foreign origin of a person referred to in clause (a) or (b) or (c)

A PIO will include an ‘Overseas Citizen of India’ cardholder within the meaning of Section 7(A) of the Citizenship Act, 1955. Such an OCI Card holder should also be a person resident outside India.

Opening of accounts by individuals/ entities of Pakistan nationality/ ownership and entities of Bangladesh ownership requires prior approval of the Reserve Bank.

However, individuals of Bangladesh nationality can open an NRO account subject to the individual(s) holding a valid visa and valid residential permit issued by Foreigner Registration Office (FRO)/ Foreigner Regional Registration Office (FRRO) concerned.

An NRO (current/ savings) account can be opened by a foreign national of non-Indian origin visiting India, with funds remitted from outside India through banking channel or by sale of foreign exchange brought by him to India. The balance in the NRO account may be paid to the account holder at the time of his departure from India provided the account has been maintained for a period not exceeding six months and the account has not been credited with any local funds, other than interest accrued thereon.

Any person resident outside India, having a business interest in India, can open a Special Non-Resident Rupee Account (SNRR account) with an authorised dealer for the purpose of putting through bona fide transactions in rupees which are in conformity with the provisions of the Act, rules and regulations made thereunder. The features of the SNRR account are:

1. The SNRR account will carry the nomenclature of the specific business for which it is opened and not earn any interest.

2. The debits/ credits and the balances in the account should be incidental and commensurate with the business operations of the account holder.

3. Authorised Dealers are required to ensure that all the operations in the SNRR account are in accordance with the provisions of the Act, rules and regulations made thereunder.

4. The tenure of the SNRR account should be concurrent to the tenure of the contract/ period of operation/ the business of the account holder and in no case should exceed seven years. No operations are permissible in the account after seven years from the date of opening of the account.

5. The operations in the SNRR account should not result in the account holder making available foreign exchange to any person resident in India against reimbursement in rupees or in any other manner.

6. The balances in the SNRR account can be repatriated outside India.

7. Transfers from any NRO account to the SNRR account are not permitted.

8. All transactions in the SNRR account will be subject to payment of applicable taxes in India.

9. SNRR account may be designated as resident rupee account on the account holder becoming a resident.

10. The amount due/ payable to non-resident nominee from the account of a deceased account holder, will be credited to NRO account of the nominee with an authorised dealer/ authorised bank in India.

11. Opening of SNRR accounts by Pakistan and Bangladesh nationals and entities incorporated in Pakistan and Bangladesh requires prior approval of Reserve Bank.

The SNRR can be held only as a non-interest earning account, while an NRO account can earn interest. While the balances in a NRO account are non-repatriable (except for current income and to the extent permissible for NRIs/ PIOs under FEMA 13(R)), SNRR is a repatriable account.

The following accounts are permitted:

1. Foreign diplomatic missions and diplomatic personnel and their family members in India may open rupee deposits with an AD Bank.

2. Diplomatic missions and diplomatic personnel can open 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, subject to conditions. The funds in the account may be repatriated outside India without the approval of Reserve Bank.

3. 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 can open foreign currency accounts 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 Such accounts can be credited by way of inward remittances and transfers (which are collected in India as visa fees) from the rupee account of the diplomatic mission in India. Funds held in such account if converted in rupees shall not be converted back into foreign currency. The funds in the account may be repatriated outside India without the approval of Reserve Bank.

Persons resident in Nepal and Bhutan can open Indian rupee accounts with an authorised dealer in India.

Any multilateral organization, of which India is a member nation, or its subsidiary/ affiliate bodies and officials in India can open deposits with an authorised dealer in India.

Yes, such acceptance of deposit and refunds, if required, will be covered under current account transactions and can be made freely without any restriction from FEMA perspective.

According to section 6(4) of the FEMA, a person resident in India can hold, own, transfer or invest in any immovable property situated outside India if such property was acquired, held or owned by him/ her when he/ she was resident outside India or inherited from a person resident outside India.

A resident individual can send remittances under the Liberalised Remittance Scheme (LRS) for purchasing immovable property outside India. In case members of a family pool their remittances to purchase a property, then the said property should be in the name of all the members who make the remittances.

The prohibition of a resident acquiring property outside India is not applicable if:

(a) The resident is a foreign national; or

(b) The property was acquired before July 8, 1947 and continued to be held after obtaining permission; or

(c) If it is acquired on a lease not exceeding five years

Immovable property can be acquired outside India:

1. Under section 6(4) of FEMA.

2. As an inheritance/ gift from a person (i) referred to in sec 6(4) of FEMA; or (ii) who has acquired it prior to July 8, 1947 (iii) who has acquired such property in accordance with the foreign exchange provisions in force at the time of such acquisition.

3. Purchased with balances in the Resident Foreign Currency (RFC) account of the resident.

4. As a gift from persons at (b) & (c) above, provided he is a relative of such persons.

5. Purchased with remittances made under the Liberalised Remittance Scheme (LRS).

6. Jointly with a relative provided there are no outflow of funds from India.

7. By an Indian company having overseas offices, for housing its business or for residence of staff.

Payment for immovable property has to be received in India and is subject to payment of all taxes and other duties/ levies in India. The payment should be received in the form of funds remitted to India through banking channels or through funds held in NRE/ FCNR(B)/ NRO accounts of the NRIs/ PIOs. Payments should not be made through travellers’ cheque and foreign currency notes. NRIs/ PIOs can avail of housing loan in Rupees from an Authorized Dealer or housing finance Institution in India subject to conditions.

Foreign Embassy/ Diplomat/ Consulate General, can purchase/ sell immovable property (other than agricultural land/ plantation property/ farm house) in India provided – 

1. Clearance from the Government of India, Ministry of External Affairs is obtained for such purchase/sale, and 

2. The consideration for acquisition of immovable property in India is paid out of funds remitted from abroad through the normal banking channels.

1. Citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, Macau or Hong Kong, irrespective of their residential status, cannot, without prior permission of the Reserve Bank, acquire or transfer immovable property in India, other than on lease, not exceeding five years. 

2. Foreign nationals of non-Indian origin resident in India (except 10 countries listed at (a) above) can acquire immovable property in India.

3. Foreign nationals of non-Indian origin resident outside India can acquire/ transfer immovable property in India, on lease not exceeding five years and can acquire immovable property in India by way of inheritance from a resident. All other acquisitions/ transfers will require the prior permission of RBI

A person who has acquired the property U/s 6(5) of FEMA or his successor cannot repatriate the sale proceeds of such property without RBI approval. However, repatriation up to USD I million per financial year is allowed, along with other assets under (Foreign Exchange Management (Remittance of Assets) Regulations, 2016) for NRIs/ PIOs and a foreign citizen (except Nepal/ Bhutan/ PIO) who has (a) inherited from a person referred to in section 6(5) of FEMA, or (b) retired from employment in India or(c) is a non-resident widow/ widower and has inherited assets from her/ his deceased spouse who was an Indian national resident in India.

NRIs/ PIOs can remit the sale proceeds of immovable property (other than agricultural land/ farm house/ plantation property) in India subject to the following conditions:

1. The immovable property was acquired in accordance with the provisions of the foreign exchange law in force at the time of acquisition by him or the provisions of Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations 2000; 

2. the amount to be repatriated does not exceed the amount paid for acquisition of the immovable property received through normal banking channels or out of funds held in FCNR(B) account or NRE account;

3. in the case of residential property, the repatriation of sale proceeds is restricted to not more than two such properties

As per section 2(ze) of FEMA transfer means, sale, purchase, exchange, mortgage, pledge, gift, loan or any other form of transfer of right, title, possession or lien.

Amendments to the Principal Regulations

1. Notification No. FEMA 65/2002-RB dated June 29, 2002
2. Notification No. FEMA 93/2003-RB dated June 9, 2003
3. Notification No. FEMA 146/2006-RB dated February 10, 2006
4. Notification No. FEMA 186/2009-RB dated February 3, 2009
5. Notification No. FEMA 200/2009-RB dated October 5, 2009
6. Notification No. FEMA 321/2014-RB dated September 26, 2014
7. Notification No. FEMA 335/2015-RB dated February 4, 2015