The major challenge for any foreign student studying in India is, he/she faces problem while opening a bank account which requires fulfillment of know your customer (KYC) norms. This might be difficult for the student to produce due to non-availability of any proof of local address. So keeping this in mind the Reserve Bank of India (RBI) has now soften the KYC rules to facilitate opening of bank accounts for such foreign students studying in India.
Now banks can open non-resident ordinary (NRO) accounts for foreign students on the basis of their passports after verifying their visa and immigration details, and on production of the admission letter from an educational institution.
However, within 30 days of opening their accounts, the students should submit rent agreements as proof of local residential address. Banks should insist on visit by landlords to branch to verify rent documents. Instead, banks should adopt alternative mechanisms to verify the local address.
In case the student is staying in the facility provided by the institution, a letter from the educational institution can also be produced as proof of residence.
Within the 30-day period, there would be cap of $1,000 on foreign remittances and Rs 50,000 on monthly withdrawal.
After 30 days and on furnishing of valid local address, the account will be operated as mandated under the NRO rules and guidelines which mean the account would be treated as normal NRO account. However, students of Pakistani nationality will need the prior approval of RBI for opening the account.
Download below notifications/circular from RBI for more information;
Foreign students studying in India – KYC procedure for opening of Bank Accounts
RBI/2013-14/237 UBD. BPD (AD). Cir.No. 4/14.01.062/2013-14
Foreign Students studying in India – KYC Procedure for Opening of Bank Accounts – UCBs