Special Non-Resident Rupee Account:  SNRR account in India

Any person resident outside India can open an SNRR account with authorised dealer bank in India having a business interest in India. This account is required to carry out bonafide transactions in rupees which conform with the provisions of the FEMA Act, rules, and regulations made thereunder. However, the Opening of SNRR accounts by Pakistan and Bangladesh nationals and entities incorporated in Pakistan and Bangladesh requires prior approval of the Reserve Bank.   

Type of account: The type of account is non-interest-bearing.

Repatriation: The amount held in the SNRR account is freely repatriable.

Tenure: The tenure of the SNRR account shall be concurrent to the tenure of the contract/ period of operation/ the business of the account holder and in no case should exceed seven years. Approval of the Reserve Bank shall be obtained in cases requiring renewal.

Debits and credits specific/ incidental to the business proposed to be done by the account holder. The permitted transactions to this account are:

• Trade (Export/import) invoicing in Indian Rupees
• External Commercial Borrowing in Indian Rupees
• Trade credits in Indian Rupees
• Business-related transactions outside the International Finance Service Centre (IFSC) by IFSC units at GIFT city like administrative expenses in Indian Rupees outside IFSC, Indian Rupees amount from the sale of scrap, government incentives in Indian Rupees, etc.
• Tax Refunds/Payment in Indian Rupees

Debits and credits specific/ incidental to the business proposed to be done by the account holder  

SNRR account may be designated as a resident Rupee account when the account holder becomes a resident. The amount due/ payable to a non-resident nominee from the account of a deceased account holder shall be credited to the NRO account of the nominee with an authorised dealer/ authorised bank in India. Opening SNRR accounts by Pakistan and Bangladesh nationals and entities incorporated in Pakistan and Bangladesh requires prior approval of the Reserve Bank.

The difference between SNRR and NRO accounts:

An NRO account earns interest on the deposit whereas SNRR can be held only as a non-interest earning account. The balance in the SNRR account is repatriable, whereas balances in an NRO account are non-repatriable (except for current income and to the extent permissible for NRIs/ PIOs under FEMA 13(R)). The NRO account holder may remit an amount up to USD one million per financial year, out of balances held in his NRO rupee account for all bonafide purposes.

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