NRIs always have ambiguity when it comes to opening a joint account with their close relatives in India, however recently the Reserve Bank of India (RBI) norms has allowed the expatriates to open joint accounts with their close relative in India. Not only they can open joint accounts with their relatives in India, but when opened they can operate the account as ‘either or survivor’ replacing the past rules that the Indian joint account holder had to pass away and the account was operated under the ‘former or survivor’ description. Before 2014, if the NRI wanted control over the account, the Indian joint account holder had to pass away.
The system of allowing expatriates to also transact in joint accounts would be favourable in many ways and help monitor the accounts intently. Expats would also have greater authority over the accounts. However, the accounts would be dealt with the norms that apply to Resident Accounts. This means that cheques and cash from outside remittances cannot be accepted. Further, if the expatriate wants to join his/her name to the accounts of Indian joint account holders, the account holders must be close relative. Only, when the Indian counterpart dies, the sole right would go to the expatriate and the account would have to be converted to an Non-Resident Ordinary Rupee (NRO) account. There are also no restrictions on sending money from NRO accounts to foreign locations. According to RBI, the joint account holder facility may be extended to all types of resident accounts including savings bank accounts.
RBI norms allow expatriates to open joint accounts with their close relatives in India is a welcome initiative and will be beneficial to the NRIs in several ways.