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Banking for Expats in India

Author: Gavin Adie
Submitted: September 2013

India offers considerable choice in the banking sphere for expatriates and has made notable strides in modernizing banking services in recent years, although a number of exceptional rules sets the nation apart.

The Indian banking sector is made up of a near-equal number of public, private and foreign players. Many leading international banks have established a firm footing in India including HSBC, Barclays, Deustche Bank, Royal Bank of Scotland, Citibank and Standard Chartered, to name but a few.

Indian banks that are permitted by the Reserve Bank of India to provide currency conversion services offer short-term accounts for temporary visitors, known as non-resident ordinary (NRO) rupee current or savings accounts, which are relatively easy to establish. These may formed for a maximum of six months — equal to the maximum tourism visa term. These accounts commonly offer temporary visitors, or expats just off the boat, access to a wide range of banking services, including the use of a debit or credit card, ATMs, checks and Internet and phone banking.

NRO accounts generally require that you pay in at least USD500 each month, with a penalty fee applicable for failure to do so. Funds deposited in these accounts are automatically converted into rupee. When the account is closed, the bank will convert your remaining funds back to your local currency, and allow them to be simply remitted to your home bank account.

Another temporary account option if you would prefer not to regularly pay in income is a Non-Resident External (NRE) account, which does not carry a minimum periodic deposit requirement but requires that you deposit a bulk sum of foreign currency when the account is established.

Other, more permanent accounts include current accounts, which offer very low or no interest but have less or no restrictions on withdrawals. Savings accounts on the other hand offer higher rates of interest but permit a limited number of withdrawals each month.

Higher-interest accounts, called fixed deposits or time-deposit accounts, are considerably more restrictive in terms of withdrawals, and may penalize an account holder for withdrawing funds during a pre-determined “lock-in” period.

QA22 accounts are particularly useful for expats, allowing for funds to be stored in multiple currencies.  These accounts often have an added benefit in allowing international ATM withdrawals outside of India.

Identification requirements vary between banks but at a minimum prospective account holders must provide:

  • Proof of identity;
  • Proof of address;
  • A copy of your passport and visa; and,
  • A copy of your residential permit.

Comprehensive requirements in place on banks when establishing different types of accounts, can be found here: https://www.rbi.org.in/scripts/FAQView.aspx?Id=82

While some banks allow accounts to be established online, others (more often local banks) will require that you establish an account in-branch.

While the process of establishing an account in India can be relatively cumbersome, after creating your account most banks have online banking services, and some often offer extra perks such as a dedicated relationship manager, and even on-your-doorstep banking services, such as paying in checks.

ATMs are prevalent across India, even in rural areas. According to statistics from the RBI, more than 95,000 ATMs were operational across the nation at the end of March 2012, growth of 28.5 percent year-on-year, and 8,600 were in rural locations.

Due to previous restrictions on the business of international banks, local banks tend to operate a greater number of ATMs across the country. That being said, you can generally make five withdrawals from ATMs operated by banks other than your own in a month without incurring a fee, and fees aren't generally slapped on withdrawals from ATMs operated by your bank.

Credit cards too are widely accepted, and unlike elsewhere you do not need a bank account to establish one.

 

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