In this article
Yes. An NRI can hold a joint bank account with a resident family member in India, but the permitted arrangement depends on the account type, the residential status of the holders and who is the first holder.
An NRI or eligible Person of Indian Origin (PIO) can hold an NRE or FCNR(B) account jointly with a resident relative on a former or survivor basis. An NRO account can also be held jointly with a resident on that basis. Conversely, a resident Indian can include an eligible NRI close relative in a resident bank account on an either or survivor basis, subject to specific restrictions.
These arrangements do not give joint holders identical rights. Who can operate the account, whose money may enter it, who pays tax on the interest and what happens after a holder dies are separate questions.
The starting point is residential status under the Foreign Exchange Management Act, 1999 (FEMA). Indian income-tax residential status is determined independently.
Regulatory basis: RBI Master Direction No. 14/2015-16, updated 2 September 2026, and Master Direction No. 19/2015-16, updated 13 May 2026. Income-tax treatment is explained for the relevant periods under the Income-tax Acts of 1961 and 2025.
Which joint bank account arrangements are permitted for NRIs?
RBI recognises different arrangements depending on the account classification and the status of the first and subsequent holders.
| Account arrangement | Permitted resident or NRI joint holder | Operating basis | Principal restriction |
|---|---|---|---|
| NRE account, NRI/PIO first holder | Eligible resident relative | Former or survivor | Resident relative can operate during the non-resident holder’s lifetime only through permitted Power of Attorney authority |
| FCNR(B) deposit, NRI/PIO first holder | Eligible resident relative | Former or survivor | Relevant NRE joint-holding and Power of Attorney conditions apply |
| NRO account, non-resident first holder | Resident joint holder | Former or survivor | Joint holding does not remove account-operation, credit or remittance restrictions |
| Resident bank account, resident first holder | Eligible NRI close relative | Either or survivor | NRI cannot credit personal funds or operate the account to create a beneficial interest for themselves |
Source: RBI Master Direction No. 14/2015-16, Part II, paragraphs 4.3, 5.3 and 6.6; Master Direction No. 19/2015-16, section 3.
There is an important difference between NRE and NRO accounts.
For NRE accounts, RBI expressly requires the resident joint holder to be a relative within the applicable statutory definition. For NRO accounts, RBI permits joint holding with residents without expressing that same relationship condition.
An individual bank may apply additional KYC, documentation and operational requirements under its approved policies. Those requirements must be distinguished from the underlying RBI permission.
Can an NRI add a resident family member to an NRE account?
Yes. An NRI or eligible PIO can maintain an NRE account jointly with a qualifying resident relative on a former-or-survivor basis.
The resident joint holder must fall within the definition of relative in section 2(77) of the Companies Act, 2013, read with the applicable rules.
This includes spouses, members of the same Hindu undivided family and specified relationships such as parents, children, children’s spouses and siblings, subject to the exact statutory definition.
Describing someone as a family member is not enough. A cousin, uncle or another extended-family member does not automatically qualify merely because there is a family relationship.
Can the resident relative operate the NRE account?
Not independently merely because their name appears as a joint holder.
RBI Master Direction No. 14/2015-16, Part II, paragraph 4.3 provides that during the lifetime of the NRI/PIO account holder, the resident relative can operate the account only as a Power of Attorney (PoA) holder.
Paragraph 4.11 restricts operations under that authority. Permitted operations include eligible local payments, specified investment transactions and remittances through banking channels to the non-resident account holder, subject to the applicable conditions.
The resident PoA holder cannot use that authority to:
- Open an NRE account on behalf of the non-resident.
- Remit funds outside India to someone other than the non-resident account holder.
- Make a gift to a resident on behalf of the non-resident from the account.
- Transfer funds from the account to another NRE account.
The bank’s prescribed PoA or mandate requirements must be fulfilled. A family relationship, joint-holder designation or access to banking facilities does not independently enlarge the authority permitted under FEMA.
Can the resident relative deposit their own money?
The source and ownership of the money matter.
An NRE account can receive qualifying inward remittances and other permitted credits. RBI also permits current income such as rent, dividends, pension and interest belonging to the NRI/PIO account holder, provided the authorised dealer is satisfied about the source and the prescribed Indian income-tax conditions are met.
A resident relative cannot use the NRE account as their own domestic savings account merely because they are the second holder.
For example, rental income from a flat owned by the resident mother does not automatically become an eligible NRE credit belonging to her non-resident son.
This differs from rent earned by the son on Indian property he owns. In that situation, the NRE credit question is examined against the rules applicable to his current income, including the required tax evidence.
The bank credit route does not itself decide who owns the income or who must pay income tax on it.
Can an NRI and resident relative hold an FCNR(B) account jointly?
Yes. A Foreign Currency Non-Resident (Bank) account, commonly called FCNR(B), can be jointly held under the corresponding NRE conditions.
An FCNR(B) account is a foreign-currency fixed deposit. RBI Master Direction No. 14/2015-16, Part II, paragraphs 5.2 and 5.3 provide that it is maintained as a fixed deposit and that relevant NRE conditions, including joint holding and PoA operations, also apply.
Accordingly, an eligible resident relative can be included on a former-or-survivor basis. That arrangement does not automatically give the resident relative independent operating authority during the first holder’s lifetime.
Fixed deposits also require attention to the difference between maturity payment and premature encashment.
Under RBI’s Commercial Banks Responsible Business Conduct Directions, 2025, premature termination of a joint term deposit after the death of one depositor generally requires the consent of the surviving depositors and the deceased holder’s legal heirs.
However, where all depositors have furnished the prescribed specific mandate allowing premature withdrawal by the survivor after a depositor’s death, the legal heirs’ concurrence is not required.
The survivorship clause therefore does not, by itself, provide an unconditional right to prematurely encash the deposit. The mandate, deposit terms and applicable RBI conditions must be read together.
Can an NRI hold an NRO account jointly with a resident Indian?
Yes.
RBI Master Direction No. 14/2015-16, Part II, paragraph 6.6 permits NRO accounts to be held jointly with residents on a former-or-survivor basis.
Unlike the NRE provision, paragraph 6.6 does not expressly impose the same resident-relative requirement.
A bank may nevertheless require relationship information, additional KYC or other supporting documents under its operating procedures. Those requirements should be identified as bank-level procedures rather than described as an RBI prohibition that does not appear in the governing NRO provision.
What money can enter the joint NRO account?
Under RBI paragraph 6.7, permissible credits include qualifying inward remittances, legitimate dues in India and transfers from other NRO accounts.
Specified rupee gifts or loans from residents to NRI/PIO relatives may also be credited subject to the applicable FEMA conditions.
Joint holding does not remove the restrictions on credits or establish beneficial ownership of every amount in the account.
A resident operating the account under a PoA must also observe the restrictions applicable to NRO operations.
Can the money be sent abroad?
Joint holding does not make every NRO balance freely repatriable.
RBI distinguishes remittance of qualifying current income from repatriation of other balances under the applicable remittance-of-assets framework.
For eligible NRIs/PIOs, specified balances may be repatriated under the USD 1 million per financial year facility, subject to the relevant conditions, documentary evidence and Indian tax requirements.
The facility must not be treated as permission to remit every credit regardless of its source or ownership.
A resident joint holder’s name does not determine whether the funds qualify for outward remittance.
Can an NRI be the second holder of a resident Indian’s bank account?
Yes, but this is a different arrangement.
RBI Master Direction No. 19/2015-16, Miscellaneous, section 3 permits a resident individual to include an eligible NRI close relative as a joint holder of a resident bank account on an either-or-survivor basis.
The permission is not confined to savings accounts. It can extend to the types of resident bank accounts covered by the RBI conditions, including relevant savings, fixed-deposit, recurring-deposit and current accounts.
Four conditions are particularly important.
1. The account remains a resident account.
Adding the NRI close relative does not convert the account into an NRE or NRO account.
2. The NRI cannot deposit personal funds.
Cheques, remittances, cash, card proceeds or other funds belonging to the NRI close relative cannot be credited merely because the NRI is a joint holder.
3. The NRI’s operating authority is restricted.
The non-resident joint holder may operate the account for domestic payments on behalf of the resident holder. The arrangement must not create a beneficial interest for the NRI.
4. The relationship condition must be satisfied.
If the account has multiple resident holders, the NRI must qualify as a close relative of each resident account holder under the specified definition.
The authorised dealer bank must satisfy itself about the need for the arrangement and obtain the prescribed declaration from the non-resident joint holder.
What happens if the NRI becomes the surviving holder?
The RBI direction provides that when the NRI becomes the survivor, the account is to be categorised as an NRO account.
The non-resident holder must inform the authorised dealer bank so the account is appropriately classified.
That banking redesignation does not independently establish that the surviving holder is the ultimate beneficial owner of the entire balance. Succession and ownership questions remain separate.
Former or survivor versus either or survivor: what is the difference?
These expressions describe bank operating instructions and survivor arrangements, but they do not override FEMA.
Former or survivor
Ordinarily, the first holder operates during their lifetime. The survivor becomes entitled to seek payment or operation in accordance with the mandate and applicable bank claims procedure after the former holder’s death.
For an NRE account with a resident relative, RBI specifically restricts the resident relative’s lifetime operations to the permitted PoA framework.
Either or survivor
Ordinarily, either account holder may operate under the agreed banking mandate.
However, where an NRI is the second holder in a resident account, the RBI restrictions continue to apply. The NRI may operate only for permitted domestic payments on behalf of the resident and cannot use the arrangement to create their own beneficial interest.
For joint fixed deposits, payment at maturity and premature termination can involve different consent requirements.
An operating instruction is therefore not a general exemption from the account’s regulatory conditions.
Who pays Indian income tax on interest from a joint account?
The names appearing on the account do not conclusively determine who must pay Indian income tax on the interest.
The analysis considers the source of the deposits, beneficial ownership, relevant income attribution and clubbing provisions, the account classification and the individual’s eligibility for any statutory exemption.
NRE interest
For periods governed by the Income-tax Act, 1961, section 10(4)(ii) provides a conditional exemption from Indian income tax on qualifying NRE interest.
For periods from 1 April 2026, the corresponding provision appears in section 11 read with Schedule IV, serial number 1, of the Income-tax Act, 2025.
The 2025 provision retains the relevant eligibility conditions linked to being resident outside India under FEMA or holding RBI permission to maintain the account, together with the qualifying NRE-account requirement.
CBDT Circular No. 592, dated 4 February 1991, addresses interest earned through jointly held NRE accounts under the 1961 Act.
It clarifies that joint holders do not constitute an association of persons merely because their names appear together. The exemption conditions must nevertheless be satisfied individually.
Accordingly, adding a resident relative should not be treated as automatically destroying the qualifying NRI’s NRE interest exemption in India. Equally, the resident relative does not automatically acquire an independent interest exemption simply by being named on the account.
The actual entitlement to interest and the applicable statutory conditions remain relevant.
FCNR(B) interest
FCNR(B) interest has separate conditional treatment.
Under the Income-tax Act, 1961, section 10(15)(iv)(fa) provides an exemption for qualifying interest on approved foreign-currency deposits paid by a scheduled bank to eligible non-resident or not-ordinarily-resident persons.
Under the Income-tax Act, 2025, section 11 read with Schedule IV, serial number 14, carries forward the relevant provision by reference to section 10(15)(iv)(fa) and its conditions.
The exemption is not unconditional. The person, deposit, bank and applicable statutory conditions must qualify.
Joint holding alone cannot establish the tax entitlement of each holder.
NRO interest
NRO interest is not covered by the NRE interest exemption merely because the account holder is an NRI.
The applicable Indian income-tax law, entitlement to the income and withholding requirements must be examined for the relevant period. A valid tax treaty may affect the final tax position where its conditions are satisfied, but it does not automatically eliminate Indian withholding obligations.
An interest certificate or Form 26AS/AIS entry can be useful evidence of reporting or tax deduction. It does not necessarily settle disputed beneficial ownership.
Does the surviving joint holder automatically inherit the balance?
Not necessarily.
A bank’s authority to pay a surviving joint holder under a valid mandate is different from the ultimate entitlement to the deceased person’s beneficial interest.
Under RBI’s Commercial Banks Responsible Business Conduct Directions, 2025, paragraph 284, payment to an eligible nominee or survivor can constitute a valid discharge of the bank’s liability, provided the specified conditions are satisfied.
These include verifying the death and identity of the claimant, considering any relevant restraining court order and explaining that the recipient receives the payment in a trustee capacity in relation to the legal heirs.
Payment through the banking claims process does not extinguish competing legal claims to the deceased person’s beneficial interest.
There is also a distinction between a surviving joint holder and a nominee.
Paragraph 285 provides that, for a joint deposit account, a nominee’s right arises only after the death of all depositors.
Under paragraph 286, where payment to the nominee or survivor qualifies under the specified conditions, the bank must not insist on documents such as a succession certificate, probate or letters of administration merely to obtain a valid discharge. The prescribed claim form, death certificate and identity/address document remain relevant.
The legal ownership and inheritance position can require separate examination of contribution records, beneficial ownership, applicable succession law, testamentary documents and other claims.
Survivorship can simplify a bank’s payment process without conclusively settling inheritance.
What documents and steps are ordinarily required?
Banks may accept an eligible joint arrangement while opening a new account or, under their approved procedures, by adding a holder to an existing account.
The usual process is as follows.
- Identify the correct account type. Confirm whether the account is NRE, NRO, FCNR(B) or resident and identify the proposed first and subsequent holders.
- Establish residential status. Provide the applicable passport, immigration/residence, OCI or other eligibility documentation, along with resident-holder KYC evidence.
- Establish the relationship where required. Where the RBI arrangement requires a relative or close relative, provide the relevant relationship records accepted by the bank.
- Complete the operating mandate. Record the former-or-survivor or either-or-survivor instructions and complete a separate PoA or other authority where necessary.
- Complete required declarations. For a resident-first account, the prescribed declaration and the bank’s assessment of the need for the facility are relevant.
- Confirm permitted credits and operations. Establish what money may enter the account, which transactions each holder may undertake and whether any remittance requires additional documents or tax evidence.
- Preserve the bank records. Retain the approved account-opening or modification documents, mandates, relationship records, deposit instructions and source-of-funds evidence.
For joint term deposits, RBI’s responsible-conduct framework permits banks to add or delete joint-holder names subject to the applicable requirements, without changing the original deposit amount or duration.
Document formats, verification methods and application channels may differ between banks. A bank’s ability to add a joint holder to a particular existing account should be confirmed before treating the modification as complete.
If a holder subsequently changes FEMA residential status, the bank should be informed so the account classification and joint-holding instructions can be reassessed.
An example: An NRI son and his resident mother
Consider an Indian citizen working in Dubai who qualifies as an NRI under FEMA.
He maintains an NRE savings account in India and wishes to add his mother, who lives in Nagpur, as a resident joint holder.
The eligible former-or-survivor arrangement permits the mother to be named on the account.
Now suppose she wishes to operate the account independently, deposit rent from a flat that she personally owns and regard the entire account balance as her own.
The joint-holder designation does not resolve those questions.
During the son’s lifetime, the mother’s operations must comply with the permitted PoA framework.
Her personal rental income does not automatically become a permitted NRE credit belonging to her son merely because both names appear on the account.
If the son later dies, the survivor instructions may determine how the bank processes payment. They do not, by themselves, establish that the mother was always the beneficial owner of the entire balance or that no other succession rights exist.
Here, FEMA addresses eligibility and account operation. Income-tax law addresses the relevant tax treatment. Succession law may determine ultimate entitlement.
What if the joint holder lives in the USA, UK or UAE?
The Indian joint account must comply with the applicable Indian FEMA and banking provisions.
Separately, a joint holder’s country of tax residence may impose its own tax or foreign-financial-account reporting obligations.
For example, a person subject to US reporting rules may need to examine whether an Indian joint account creates a financial interest or signature-authority reporting question under FBAR.
Form 8938 is a separate reporting regime with its own scope, valuation rules, thresholds and exceptions.
Neither reporting obligation follows automatically from the Indian account’s NRE or NRO classification alone.
The relevant foreign-country tax and reporting position should be assessed under that country’s law by an appropriately qualified professional there.
Before adding a family member, identify the rights the arrangement actually provides
An NRI can hold certain Indian bank accounts jointly with resident family members. The conditions vary between NRE, FCNR(B), NRO and resident-first accounts.
The correct arrangement depends on the residential status and relationship of the holders, the account classification, the source of funds and the agreed operating mandate.
Keep the relevant records. If a holder changes residence or dies, revisit the account classification and applicable survivor instructions instead of assuming the original arrangement resolves everything.
Being named on the account, being authorised to operate it, owning the money and inheriting the balance are four different questions.
Primary sources
- RBI Master Direction No. 14/2015-16, Deposits and Accounts. Updated 2 September 2026. Relevant provisions: Part II, paragraphs 4.3, 4.7, 4.11, 5.2, 5.3, 6.6 to 6.8, 6.10 and 6.11.
- RBI Master Direction No. 19/2015-16, Miscellaneous. Updated 13 May 2026. Relevant provision: section 3, resident bank accounts with NRI close relatives.
- RBI Commercial Banks Responsible Business Conduct Directions, 2025. Updated 1 October 2026. Relevant provisions: paragraphs 174, 178, 179, 284 to 286 and 296 to 297.
- Income-tax Act, 2025, as amended by Finance Act, 2026. Section 11, Schedule IV, serial numbers 1 and 14.
- CBDT Circular No. 592, dated 4 February 1991, addressing NRE interest in joint accounts under the Income-tax Act, 1961.
This article provides general educational information about India-side banking, taxation and succession questions. It is not advice on any individual’s particular facts. Foreign-country tax, reporting and succession law require separate consideration under the applicable jurisdiction.
Share this guide
Sources and review
Published