"I am unable to pay my parents' utility bills because my bank force me to shut my Indian bank account down as I am Non-Resident Indian (NRI) now. I have to send international remittance to my dad's account from where he withdraws the money via a local ATM and goes to the utility office to physically pay the bills."
- Harsha S., Data Science Consultant
" I am unable to use my US credit card to purchase flight tickets for my parents via any Indian airline website. Only option that I have is to use my dad's Indian account and coordinate with him for OTP and then do a remittance etc., which is quite the hassle."
- Srinath A., Software @ Stripe
"I am very bullish on the Indian economy. I want to invest in the public and private markets, and real estate. I have tried several times, it is virtually impossible to open and operate a demat account from the US. The only option I have is investing in ETFs and Index funds that give me exposure to Indian markets."
- Anirudh R., Data Science @ Meta
Reserve Bank of India (RBI) requires Indians residing abroad a.k.a Non-Resident Indians (NRIs) or Indian Expats to have non-resident (NRE/NRO/FCNR) bank accounts. These accounts are needed for depositing any foreign funds in India, for investing, or for collecting any income from an Indian source such as rental income. Even though most Indian banks offer these accounts, it is extremely difficult to open these non-resident bank accounts remotely if you are not physically in India.
Even if one manages to open, as the 32 million NRIs are not a priority for the Indian banks, the whole end-to-end experience is very sub-optimal. Common pain points include, managing the account online (e.g., updating mailing address), making transactions (e.g., receiving One Time Password (OTP) for authorizing a transaction on a US phone number), lack of transparency in account fees (e.g., account maintenance fees), contacting customer support (e.g., getting support via chat or phone during US working hours), and complying with taxation requirements (e.g., annual filing requirements both in India and the US).
Per RBI, banks (referred to as authorized dealers) should ensure NRIs only have permitted non-resident accounts with them. It is not just for new accounts, if a NRI had resident accounts in India prior to their move to a foreign country, those accounts need to be closed or converted to non-resident bank accounts as well. In short, non-resident bank accounts are the only legal and reliable banking option for NRIs whether they want to support their parents/families back home, collect rent from properties in India, transact online, or invest in India.
On a similar vein, when it comes to investments, Securities and Exchange Board of India (SEBI), doesn't allow video or remote KYC outside the geographical borders of India. There is a need for an investing platform built specially for NRIs to cater to their unique requirements (e.g., NRI focused legal and tax compliance support).
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