Banking Products For

NRI

Class – B.COM 5
Faculty – Ms.Neeru Jaswal
 NRI BANKING
• In order to provide a safe haven for the incomes
earned by Indians, who work in foreign
countries, Government of India in association
with RBI launched NRI Banking services in 1970.

• This is a special banking service offered only to

those Indian citizens, who work or hold business
outside the country, and are looking forward for
a banking channel for savings and remittances
 Non Resident
• Resident
• An individual will be treated as a Resident in
India in any previous year if he/she is in India for:
• Atleast 182 days in that year, OR
• Atleast 365 days during 4 years preceding that
year AND atleast 60 days in that year.
• An individual who does not satisfy both the
conditions as mentioned above will be treated
as “non-resident” in that previous year.
 Types of NRI Bank
Accounts
• Based on the underlying currency and mode of
use, NRI BANKING permits 3 types of accounts,
which are available with private as well as public
sector banks. All of them are governed by
Exchange Control Regulations.

• NRE – Non Resident External Account

• NRO – Non Resident Ordinary Account
• FCNR – Foreign Currency Non Resident Account
 Non Resident External
Rupee Account
• The NRE account is an Indian rupee-denominated
account, offering complete security.
• These accounts can be in the form of savings,
current, recurring, or fixed deposits.
• The foreign currency you deposit into the account is
converted to INR.
• You can transfer your funds (Principal & Interest
amount) to a foreign account from an NRE account
without any complications and restrictions.
• You need to noted that the amount you deposit into
these accounts must be earned outside India.
 Non Resident Ordinary
Rupee Account
• An NRO account is a savings or current account held
by NRIs in India to manage their income earned in
India.
• Account-holders can deposit and manage their
accumulated rupee funds without any hassle.
• The account allows you to receive funds in Indian.
• You can apply for an NRO account jointly with a
resident Indian or even an NRI. It is even feasible to
transfer money from your current NRE account.
However, the interest you earn in this account is
subject to Tax Deducted at Source (TDS).
 Foreign Currency Non
Residential ACCOUNTS
• FCNR or Foreign Currency Non-Residential Account
facilitates deposits made by Non-Residential Indians
(NRIs) or Persons of Indian Origin (POI).
• NRIs or POI can make these deposits in the currency of
their country of residence and shall be held in that
account in any one of the foreign currencies prescribed
by RBI.
• Theses deposits can be held in the form of Fixed
Deposits.
• Maturity period of deposits ranges from 1- 5 years.
• Rate of interest on fixed deposits is higher.
• Principal and interest earned thereon are exempted from
tax.
 CREDIT SCORE
• A credit score is a number between 300-850 that depicts
a consumer's creditworthiness. The higher the score, the
better a borrower looks to potential lenders.
• A credit score is based on credit history: number of open
accounts, total levels of debt, and repayment history, and
other factors. Lenders use credit scores to evaluate the
probability that an individual will repay loans in a timely
manner.
• The credit score model was created by the Fair Isaac
Corporation, also known as FICO, and it is used
by financial institutions
 Factors affecting Credit
Score

• Payment History - High Impact:

• Credit Utilisation Ratio - High Impact:
• Age of the Credit - Medium Impact:
• Total Accounts - Low Impact:
 Credit Information Report

• Credit Information Report contains details of

your credit history and track record in taking and
repaying loans from banks and NBFC’s.
• A Credit Information Report (CIR) is a report on
past repayment performance as reported by
various member banks and financial institutions
about an individual. It is important that you
monitor your CIR from time to time
Information included in CIR
• The CIR is a month-on-month record of your loan-related EMI
payments and/ or credit card payments. It does not include your
investment or savings details. Loans include home loans, personal
loans, automobile loans and overdraft facilities.
• Other information included in a CIR:
• Personal information such as your name, date of birth, address and
identification numbers like PAN, passport number, voters number
and telephone number as reported by member banks and credit
institutions.
• Account information such as type of credit availed (various loans,
credit card etc), the size of loan/ credit card limit, outstanding
current balance, overdue amount, number of days a payment is
overdue, status (written off/ settled), etc.
• Number of ‘Enquiries’ made by banks about your credit profile- An
“Enquiry” is created on your CIR every time the lender requests
CIBIL for your CIR (this usually happens when a consumer applies for
credit).
THANK YOU