Insvestment Opportunity for NRI

• Deposit in Banks
• Immovable Property
• Securities Bonds & Mutual Funds
• Through Life Insurance Policies
• Investment in Stock Market & Portfolio investment

Bank Deposits

A NRI can open an account in any Bank holding an authorized dealer’s license (i.e. authorized to deal in foreign exchange) issued by Reserve Bank. Certain co-operative/commercial Banks (referred to as authorized banks) have also been specifically permitted to maintain accounts of NRIs. NRIs can maintain these accounts with or without repatriation facility. These can be maintained either in rupees or in foreign currency.

Acquisition

An Indian citizen or a person of Indian Origin, resident outside India, can acquire any immovable property in India other than agricultural/plantation property or farm house. No permission is required under FEMA for acquiring this property. However, for acquisition of agricultural land, plantation property or farmhouse, permission of RI3I is required.

Transfer

The property acquired by a person under these provisions can be transferred to a resident, or an NRI or a person of Indian origin.

Repatriation

The repatriation of the sale process is allowed without prior approval of RBI if property is acquired according to the provisions of FEMA. However the facility of repatriation shall be restricted to the cost of the properties bought taking into account that the payment for acquisition was received in foreign Exchange by inward remittance or from FCNR (B) or NR(E) account of the seller. In case of sale of residential properties, repatriation will be allowed for maximum of two such properties.

Housing Loans facility

Authorized dealers and housing finance institutions are permitted to grant housing loans to NRIs for acquisition of residential property. These loans have to be fully secured by mortgage of the property, which is to be acquired. The terms and conditions of these loans should be same as are applicable to loans given to residents.

Loan amount should not be given by way of credit to NR(E)/FCNR/NRNR account of the person. Repayment of these loans can be made out of the balance in the non-resident bank accounts in India or out of the rental income from the property acquired by utilization of the loan.

Loan should be fully secured by equitable mortgage of property proposed to be acquired. Authorized dealers are also permitted to grant loans to NRIs against their NR(E)/FCNR deposits for acquiring house property in India.

Mutual Funds

NRIs can invest in the Indian Mutual Funds out of remittances from abroad or out of funds held in their NRE/FCNR/NRO accounts, provided the transaction is done through the authorized dealer maintaining the account. In fact, many asset management companies have even launched NRI targeted funds both in debt as well as equity category to attract investments from NRIs. Apart from these, NRIs can invest in other funds as well.

Can the sale proceeds of mutual funds be repatriated?
Upon redemption of Mutual Fund units purchased out of the funds held in NRO account, the funds will be credited back to the NRO account and are not to be remitted ahrwad. But the interest/dividend earned on such investments is fully reparable, on production of a Chartered Accountant’s certificate and an undertaking /certificate regarding payment of tax from the Income Tax Authorities.

Under the repatriable option units can be purchased out of funds in NRE/FCNR account and upon redemption can be remitted abroad. Alternatively, units can also be purchased through an authorized dealer by means of Indian Rupees draft purchased abroad and drawn in the name of the scheme, payable at Mumbai.

Life Insurance

The NRIs are allowed to take insurance policies on their visit to India or from their present country of residence through Mail Order. What are the limits on the Minimum & Maximum Sum Assured ? Minimum Sum Assured : Rs. 2 Lacs. Maximum Sum assured No. Limits Are there any restrictions on NRIs ? NRIs are allowed to go for all the plans subject to the following restrictions:

• Under Pure term insurance plans the maximum Sum Assured allowed will be Rs.25 Lacs.
• The Term Rider benefit will be allowed up to a maximum Rs.25 lacs.
• Critical Illness benefit will not be allowed.

• NRIs can pay the premium in any of the following manner: Direct remittance from the country of his/her present residence through banking channels.
• Cheques drawn on his/her Non-Resident (External) Account or Foreign Currency (Non-Resident) Account with a Bank in India held in single name or jointly.
• Cheques drawn on bank accounts held in India in their own names, either own names, either solely or jointly with the resident family members.
• Cheques drawn on an account maintained by a resident parent or spouse of the Non- Resident Policyholder with a bank in India.
• By the employers in respect of policies issued to their employees who have been deputed abroad by them.
• Premiums can be paid in cash by a resident parent or spouse of the Non-Resident policyholder.

The settlement of claims on rupee life insurance policies in favour of claimants resident outside India will be permitted in Imeign currency only in proportion in which the amount of premiums paid in foreign currency in relation to the total premiums payable.