The Indian diaspora holds an estimated $130 billion in Indian bank deposits. The regulatory framework governing those deposits — who can open what type of account, in what currency, with what interest rate, and how much can be repatriated — has generated 314 RBI circulars since 1994, anchored by the single most-referenced document in the entire FEMA dataset: the Deposit Regulations 2016 (FEMA 5(R)/2016-RB), with 163 downstream references.
Alongside deposits, the regime governs NRI acquisition and transfer of immovable property in India — a separate but closely linked chain of 68 circulars.
See also: Foreign Exchange Regulation in India — The Complete Timeline
For the policy story behind NRI property restrictions, the country exclusion list, and NRO repatriation rules — see Why Can an NRI Buy a Flat but Not a Farm?.
The Three Account Types
Every NRI banking relationship in India runs through one of three accounts:
NRE (Non-Resident External) — Schedule 1 of Deposit Regulations:
- Denominated in Indian rupees
- Funded by inward remittances or transfers from other NRE/FCNR(B) accounts
- Fully repatriable — principal and interest can leave India freely
- Interest is tax-free in India
- Available only to NRIs (Indian citizens living abroad)
FCNR(B) (Foreign Currency Non-Resident Bank) — Schedule 2:
- Denominated in foreign currency (USD, GBP, EUR, JPY, CAD, AUD)
- Funded by inward remittances
- Fully repatriable in the same foreign currency
- No exchange rate risk for the depositor (borne by the bank)
- Available only to NRIs
- Term deposits only (1–5 years)
NRO (Non-Resident Ordinary) — Schedule 3:
- Denominated in Indian rupees
- Funded by rupee income in India (rent, dividends, pension) or inward remittances
- Restricted repatriation — subject to annual limits and tax clearances
- Available to any person resident outside India (not just NRIs)
- Savings and current accounts permitted
The basic prohibition from which everything else flows:
"Save as otherwise provided in the Act or Regulations, no person resident in India shall accept any deposit from, or make any deposit with, a person resident outside India." (RBI_10325, Regulation 3)
The three account schemes are the "otherwise provided" exceptions. Interest rate policy on these accounts has been a periodic lever — in November 2011, the RBI hiked NRE and FCNR(B) deposit rates to attract dollar inflows during a period of rupee pressure, illustrating how NRI deposit regulation intersects with balance of payments management — see RBI hikes Interest Rates on NRE and FCNR(B) Deposits (PR_25471).
Definitions
"'Non-Resident Indian (NRI)' means a person resident outside India who is a citizen of India." Foreign Exchange Management (Deposit) Regulations, 2016 (
"'Person of Indian Origin (PIO)' means a person resident outside India who is a citizen of any country other than Bangladesh or Pakistan." Foreign Exchange Management (Deposit) Regulations, 2016 (
PIO includes OCI cardholders: "The expression 'Person of Indian Origin' includes an 'Overseas Citizen of India' cardholder within the meaning of Section 7(A) of the Citizenship Act, 1955."
Additional Account Types
SNRR (Special Non-Resident Rupee) — Schedule 4:
"Any person resident outside India having a business interest in India may open, hold and maintain with an authorised dealer in India a Special Non-Resident Rupee Account." (RBI_10325, Regulation 5(4))
The 2003 Repatriation Liberalisation
Before January 2003, NRO repatriation was a maze of purpose-specific caps:
"At present, authorised dealers are allowed to repatriate funds held by NRIs/PIOs in their NRO Accounts, for the following purposes: (i) Education upto USD 30,000 per academic year. (ii) Medical Expenses upto USD 100,000. (iii) Sale Proceeds of immovable property, held for a period of 10 years, upto USD 100,000 per calendar year." (RBI_1033, January 13, 2003)
NRO Repatriation — USD 1 Million Unified Limit (Facilities to NRIs/PIOs and Foreign Nationals – Li) (28 downstream refs) replaced the maze with a single limit:
"It has now been decided to remove the present dispensation of permitting different amounts for different purposes and also to enhance the overall limit to USD 1 million per calendar year." Facilities to NRIs/PIOs and Foreign Nationals – Liberalisati...
The country exclusion clause: "The existing prohibition regarding repatriation of assets to a citizen of Pakistan, Bangladesh, Sri Lanka, China, Afghanistan, Iran, Nepal and Bhutan shall continue."
Immovable Property — 68 Circulars
The Immovable Property Regulations 2018 (FEMA 21(R)/2018-RB) (71 downstream refs) governs NRI property rights in India.
What NRIs Can Buy
"An NRI or an OCI may acquire immovable property in India other than agricultural land/farm house/plantation property: Provided that the consideration shall be made out of (i) funds received in India through banking channels by way of inward remittance from any place outside India or (ii) funds held in any non-resident account maintained in accordance with the provisions of the Act." (RBI_11248, Regulation 3)
The prohibition: "No payment for any transfer of immovable property shall be made either by traveler's cheque or by foreign currency notes."
Gifts and Inheritance
"An NRI or OCI may acquire any immovable property in India other than agricultural land by way of gift from a person resident in India or from an NRI or from an OCI, who in any case is a relative as defined in section 2(77) of the Companies Act, 2013." Foreign Exchange Management (Acquisition and Transfer of Imm...
Repatriation of Sale Proceeds
"The authorised dealer may allow repatriation of the sale proceeds outside India, provided: (i) the immovable property was acquired in accordance with the provisions of the foreign exchange law in force at the time; (ii) the amount for acquisition was paid in foreign exchange through banking channels or out of FCNR or NRE accounts; (iii) in the case of residential property, the repatriation of sale proceeds is restricted to not more than two such properties." (RBI_11248, Regulation 8(b))
Two residential properties — that's the limit for repatriable sale proceeds.
Spousal Joint Acquisition
"A person resident outside India, not being an NRI or OCI, who is a spouse of an NRI or OCI may acquire one immovable property jointly with his/her NRI/OCI spouse. Provided that the marriage has been registered and subsisted for a continuous period of not less than two years immediately preceding the acquisition." (RBI_11248, Regulation 6)
Country Prohibitions
"No person being a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, Hong Kong or Macau or Democratic People's Republic of Korea (DPRK) without prior permission of the Reserve Bank shall acquire or transfer immovable property in India, other than lease, not exceeding five years. Provided this prohibition shall not apply to an OCI." (RBI_11248, Regulation 9)
Deposits with Companies
Beyond bank accounts, the Deposit Regulations also govern NRI deposits with Indian companies:
Repatriation basis (Schedule 6): Companies can only renew existing repatriable deposits from NRIs/PIOs — they cannot accept new ones:
"A company registered under Companies Act, 2013 shall not accept deposits on repatriation basis from a non-resident Indian. The company may, however, renew the deposits which had been accepted on repatriation basis." (RBI_10325, Regulation 6)
Non-repatriation basis (Schedule 7): Companies, partnership firms, and proprietary concerns can accept NRI deposits on a non-repatriation basis.
Last updated: April 2026
For the full narrative, see Why Can an NRI Buy a Flat but Not a Farm?.