Introduction to NRIs, PIOs and OCBs

All Non Resident Indians [NRIs], Persons of Indian Origin [PIOs], and Overseas Corporate Bodies [OCBs] are provided the facility to open as well as maintain bank accounts, invest in shares and securities, make deposits with Indian companies or firms, and acquire immovable properties.

Hence, one needs to look into the eligibility criteria before any of these facilities are made available to NRIs, PIOs, or OCBs. Also, it must be noted that the facilities that are made available to them differ from scheme to scheme. Non resident Indians

An NRI is an Indian citizen who holds a valid passport and stays abroad for an indefinite period for business or vocation purposes. This definition of NRI includes Indian citizens posted in the United Nations [UN] organizations, officials deputed by central or state governments, and Public Sector Undertakings [PSU]. People who go abroad for vacation or for medical treatment and students are not treated as NRIs.

The spurt of the growth of expatriate population has led to the emergence of a lot of associated banking services. Apart from the remittance needs, the better-off as well as the well-informed Indian expatriates are keen to look for opportunities to make complete use of their wealth. Such expatriates are also known as Non resident Indians [NRIs] who constitute an important sub-segment of the customer base of banks.

The government has launched several schemes for NRIs that provide NRIs the following benefits:

• Income tax and wealth tax exemptions on income earned on the deposits
• Reparability of the holdings of NRIs in their accounts
• Exclusive investment opportunities providing the facility of repatriation
• Investment opportunities in stocks and real estates.

Persons of Indian Origin

A Person of Indian Origin [PIO] is a foreign citizen, other than a citizen of Pakistan or Bangladesh, who:

• At any time held an Indian passport

• He, either of his parents, or any of his grandparents was a citizen of India by virtue of the constitution of India or according to the Citizenship Act, 1955

Similar to facilities provided to NRIs, PIOs are also extended facilities to open and maintain bank accounts as well as invest in shares and securities. These facilities include spouses of Indian citizens or PIOs, who are allowed to open bank account and invest jointly with their NRI spouses.

The definition of PIO excludes citizens belonging to the following countries:

• Pakistan
• Bangladesh
• Afghanistan
• Bhutan
• Sri Lanka
• Nepal

Overseas Corporate Bodies

Corporate bodies that are owned by persons of Indian origin, residing outside India or persons of Indian nationality are known as overseas Corporate Bodies [OCBs]. This definition of OCB also includes companies, societies, partnership firms, and other corporate bodies, that are owned directly or indirectly to the extent of at least 60 per cent by individuals of Indian nationality or persons of Indian origin residing abroad.

In addition, OCBs also include trusts, in which individuals hold at least 60 per cent of the beneficial interest, which is irrevocable. A nominee under a trust is not entitled to be treated as OCB.

For the purpose of opening accounts, the ownership pattern needs to be established expressly through a certificate issued by an Overseas Auditor, A Chartered Accountant, or a certified Public Accountant. Different forms are stipulated to distinguish the ownership held directly or indirectly. The certificates issued should indicate that the interest is held actually and not in the capacity of a nominee.