Non Resident Bank Account

#1 Sep 23rd, 2017, 04:22
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  • Seasaw is offline
#1
Sorry if this question has been answered elsewhere. I did check the Money Issues section...

I am heading to India for four months and would like to open a bank account while there to try to cut down on bank fees. Is it possible to deposit rupees into the new account or does it have to be a bank transfer from Canada?

My plan is to send the money to myself via Western Union.

I have googled this question but can't seem to get a definitive answer.

Thanks,

Susan
#2 Sep 23rd, 2017, 06:00
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#2
Quote:
Originally Posted by Seasaw View Post ... Is it possible to deposit rupees into the new account or does it have to be a bank transfer from Canada? ...
Sure you can, as long as you keep all the electronic and paper records of your inward transactions in India and it is a Non-Resident Ordinary (NRO) account. But the burden of proof of inward remittance for such rupee deposits is much higher, the paperwork horrendous, and the scrutiny is onerous. Don't go there.

My advice is that you are better off keeping your cash in a convertible currency and deposit it directly into your NRO (Ordinary) or NRE (External) account as Foreign Exchange cash (US$ or CA$), subject to RBI limits. (Currently US$5000 (or equivalent) in cash per trip). Carry just enough cash to tide you over for the first few weeks or, even better, use your ATM card to withdraw Rs.10,000 at a time from your Canadian account to get by until the Indian bank account is set up.

It will be cheaper and safer to do an electronic transfer from your Canadian (CA$) account to your Indian Rupee (INR) account once it is set up rather than using a Western Union kind of outfit.

But it's your life, your money.
#3 Sep 23rd, 2017, 06:23
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#3
What bank fees are you trying to reduce?

How will using Western Union save fees?

Four months is not enough time to consider opening an account, unless you are doing business that requires writing cheques in Rs. As already noted, there are a number of subtleties, rules, and types of accounts. Everything is harder to do in India than in Canada.

If you merely want to transfer living expenses for yourself, an ATM card is the easiest thing, and the convenience generally makes up for any ATM fees. Of course there are ways to eliminate ATM fees if that is important, for example by opening an account in your home country that reimburses ATM fees.

Maybe the ATM thing is not applicable to your situation, but you haven't explained why you need a bank account. You talk about sending money from Canada; but then you ask about depositing Rs into the account. Are you planning to earn Rs in India, and if so are you permitted to do so?

Rupees are not like euros or some other freely-convertible currency; there are a number of regulations.
#4 Sep 23rd, 2017, 06:38
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#4
I've used ATM machines on past trips and I find them to be quite pricey given that I can only withdraw 10,000 INR at a time. When it comes to paying for longterm accommodation and the like, it can really add up. Plus it's a pain to return time and time again to the ATM.

I appreciate the advice re a bank account. They make it sound easy on the websites I've researched but if it is a hassle, then I'll keep paying fees I guess.

As for WU, I've sent money that way in the past and didn't think the cost was out of line.

Thanks!
#5 Sep 23rd, 2017, 06:40
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#5
Just re-read ViSHVa'spost. I guess the hassle is with rupees. I'll consider bringing CDN $s instead!
#6 Sep 23rd, 2017, 06:44
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#6
The money is simply to live on. I have no intention of working in India or anywhere for that matter (smile). I can send money to myself via WU and collect it in INR instead of dollars. Nothing nefarious...just trying to keep the fees to a minimum.
#7 Sep 23rd, 2017, 06:53
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#7
Carrying cash is risky because of the security implications. Stay safe, and pay a mite more, I'd suggest. Bite the bullet and use ATMs. In Delhi and Bombay, I have withdrawn Rs.20,000 per day from my UK account at times, sometimes even a few days in a row, with no issue.

But if you open a local account, and then deposit your cash in there, then too that is preferable to carrying your travel money in your back pocket.

But, gosh! They do so make it so so so hard to open bank accounts in India as a foreigner. I've been there, done that! I padded around the streets of Bombay for a couple of weeks clutching my wallet with a substantial seven zero 'payable on demand' banker's draft in it before I could deposit it.
#8 Sep 23rd, 2017, 11:42
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#8
Suppose is some one opens an account in ICICI or SBI bank in Canada can they withdraw cash from an ATM in India without the charges?
#9 Sep 25th, 2017, 04:05
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#9
Wow, I guess the amount of "trouble" with opening an account may vary with the bank. My personal experience with State Bank of India in Bangalore was that it was very straightforward to open both an NRO and an NRE account. They took photocopies of various documents (with signatures for "self-attestation"). The chequebooks and ATM cards for the accounts came within about a week. (I chose to pick them up at the bank; you can have them mailed to your address too.)

For the NRE account it was very easy to make the initial deposit with foreign currency at the cash counter. It is definitely not possible to deposit rupees into an NRE account (although you can withdraw the funds as rupees freely). I have no experience with depositing a foreign currency draft like ViSHva.

For the NRO account, I deposited a smallish amount (Rs 10,000 or so) in cash at the counter just for the account opening and no questions were asked nor any paperwork requested for the source of the funds. Later I used the ATM card to deposit some more cash and again there was simply no problem. I strongly suspect the question of additional paperwork and proving your rupees were obtained in a sanctioned manner only comes up for larger, substantial cash deposits (which I have not attempted). Transfers to the NRO account from abroad (e.g., from Canada for you) are of course exempt from such paperwork. Direct transfers from other Indian bank accounts will work but the sender has to mark the transfer as something appropriate (e.g., gift, rent).

So I somewhat disagree with the earlier comment suggesting opening an account is not worth it for a four-month stay. I think it can be very useful - not only can you amortize the fee your Canadian bank charges for wire transfers or ATM withdrawals by making one large deposit, your Indian account will also allow you to pay your utility bills easily, make direct transfers to others easily, and use "electronic wallet" services like PayTM during your stay in India. All of these are harder or impossible if you can only rely on your Canadian account.

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