Account architecture
NRE, NRO, FCNR and resident accounts each have distinct opening, funding, repatriation and redesignation rules. The wrong account for the wrong source is a daily FEMA breach.
Last reviewed: · Reviewed by Regi Tom Antony, FCA
For a banking decision, begin with NRE, NRO and FCNR account eligibility, then distinguish NRO operating and source-of-funds rules from the permitted repatriation route. A property transaction also needs OCI and NRI property rules; non-standard cases belong in the RBI approval guide.
NRE, NRO, FCNR and resident accounts each have distinct opening, funding, repatriation and redesignation rules. The wrong account for the wrong source is a daily FEMA breach.
Property sale, gift, inheritance and rental income each need a specific banking path. NRO for Indian-source proceeds. NRE for inward remittance. Direct overseas wiring is not allowed.
Investment into Indian companies triggers FC-GPR (allotment) and FC-TRS (transfer) filings. Late or missing filings block downstream repatriation and invite RBI scrutiny.
Historic account misuse, missed filings, wrong routing or old defaults can often be regularised through RBI compounding. The key is a documented, chronological evidence pack.
A family gift of ₹10 lakh from a resident parent to an NRI child can be a FEMA breach if it does not route through the correct account. A missed FC-GPR filing on a ₹5 lakh startup investment blocks all future repatriation of dividends or exit proceeds. FEMA applies to the structure, not just the size — the same logic runs through NRI investment and FEMA compliance for inbound capital from foreign parents and OCI investors.
OCI-specific FEMA guide→Most NRI FEMA compliance runs through a handful of filings: Form 145 (formerly 15CA) and, where required, Form 146 (formerly 15CB) for remittances from NRO; Form FC-GPR within 30 days of a company issuing shares to you; Form FC-TRS within 60 days when shares change hands between a resident and a non-resident; and the annual Foreign Liabilities and Assets return by 15 July for Indian companies with foreign investment. Banks file some reports themselves, but responsibility for getting them right stays with you or the company.
Under Section 13 of FEMA, a contravention can attract a penalty of up to three times the amount involved where it can be quantified, or up to ₹2 lakh where it cannot, with an additional daily penalty for continuing defaults. In practice, voluntary compounding usually produces a far lower amount than adjudication.
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