Special Non Resident Rupee Account (SNRR) FAQs SERIES I

The following accounts are allowed to be opened by non residents as per RBI regulations:

1. Non- Resident External Rupee (NRE) Account – Savings / Current / Recurring / Fixed Deposit account opened by Non-resident Indian (NRI) or Person of Indian Origin (PIO) to deposit his foreign earnings in India.

2. Non-Resident Ordinary Rupee (NRO) Account – Savings / Current / Recurring / Fixed Deposit account opened by any person resident outside India for managing his income in India such as rent, dividend, pension, interest etc.

3. Foreign Currency (Non-Resident) (FCNR) Account – Fixed Deposit account

Opened by NRI or PIO to save money earned overseas in a Fixed/Term Deposit in India.

4. Special Non-Resident Rupee (SNRR) Account – Current account opened by any person resident outside India (Individual or Corporate) having some sort of business interest in India. SNRR account has been allowed to be used for specified transactions in trade, foreign investments, External Commercial Borrowings, etc., in lieu of sending inward/outward remittances by a person resident outside India in a convertible foreign currency for each transaction with a resident or vice-versa.

FAQs with respect to the SNRR Account

Janya ( a fictional character who is very inquisitive and questions everything)

Tanishi ( a fictional character who has got great acumen and has all the answers)


Janya: Who can open SNRR account in india

Tanishi: Those persons, whether individual or corporate, who are resident outside India, can open SNRR a/c in india.


Janya: What are the permitted transaction in SNRR a/c’s

Tanishi: SNRR account can be opened for below mentioned INR transactions:

1. Investments made in india in accordance with FEMA regulations 2019 (both debt and non-debt instruments)

2. Export/ Import trade Invoicing

3. External commercial borrowings in INR

4. Trade credits

5. Business related transactions undertaken by IFSC units at GIFT City


Janya: Whether LRS transactions are permitted thru SNRR a/cs

Tanishi: No, Liberalised transactions are not permitted thru SNRR a/c


Janya: Can this account carry the nomenclature of the specific business; say Janya & Company Or Janya Exim.

Tanishi: The SNRR account should carry the nomenclature of the specific business for which it is in operation. Whereas, the NRO, NRE accounts are opened in the name of the individual and does not carry nomenclature of the specific business.


Janya: What type of account can be opened thru SNRR

Tanishi: Only current account can be opened thru SNRR a/c


Janya: Does this account bear any interest yield.

Tanishi: Unlike, NRO, NRE, FCNR accounts; there is no interest income on the balances or term deposits, under this type of account.


Janya: Is repatriation from this account allowed

Tanishi: Yes, the balances in this account are eligible for repatriation subject to payment of due/ applicable taxes within India.


Janya: If the person becomes resident after some time, what will be the impact on SNRR a/c

Tanishi: SNRR a/c will be designated as resident rupee account when the account holder becomes Indian resident.


Janya: Is there any facility for opting of nomination to this SNRR account

Tanishi: Yes, the account holder can appoint nominee to this account, in case of his death.


Janya: In case of death of the SNRR account holder, what will be the status of the funds lying in this account

Tanishi: The due/ payable amount will be credited to the NRO a/c of the non-resident nominee from the account of the deceased SNRR account holder.


Janya: Can nationals of Pakistan and Bangladesh open SNRR a/c

Tanishi: Yes, the nationals and entities incorporated in Pakistan and Bangladesh, can open SNRR a/c with prior approval of RBI.


Janya: What will be the procedure in case of debit to SNRR a/c for onward credits domestically.

Tanishi: In case of receipt of Export proceeds by an Indian party, by debit to SNRR account of the overseas buyer:

  • As in case of any inward remittance received for export payment, the AD bank handling the export documents shall ensure compliance with all export related rules/regulation/ guidelines prescribed under FEMA.
  • The AD bank maintaining SNRR account shall be responsible for performing due diligence of the overseas client and related FEMA compliances.


Janya: What will be the procedure in case of credit to SNRR a/c, received from a domestic account.

Tanishi: In case of payment for Imports by an Indian party by credit to the SNRR account of the overseas seller:

  • As in case of any outward remittance sent for import payment, the AD bank handling import documents and remitting funds (Importer’s Bank) shall ensure compliance with all related import rules/regulations/guidelines prescribed under FEMA.
  • It shall also communicate all details related to the importer as required by the AD bank maintaining the SNRR account of the overseas client.


Janya: Whether A2 form reporting compliance need to be done

Tanishi: Yes, any underlying transaction by a domestic Indian party, which requires A2 reporting for remittance overseas will require the same in case of a domestic remittance for credit to an SNRR Account.


Janya: Whether inter SNRR fund transfer is permitted

Tanishi: Yes, it is permitted only between SNRR A/Cs of same non-resident person for the purpose for undertaking different categories of transactions such as trade, ECB, Trade credits, etc


Janya: Whether SNRR account holder can receive proceeds or make payments from/to the offshore accounts of the other offshore entities

Tanishi: No, only eligible receipts/payments to offshore accounts of the non-resident entity holding the SNRR account are allowed.


Janya: Who is responsible for ensuring the operations in SNRR a/c’s

Tanishi: The Authorized dealers have to ensure that all the operations in SNRR a/c’s are in accordance with the provisions of the Act, rules and regulations.


Janya: Can the other income like rental income be credited to SNRR a/c

Tanishi: No, the receipts or credits and withdrawals or debits; need to be specific to the proposed business of this account holder. Any other transactions are not allowed in this account.


Janya: Is there any life or tenure of this account.

Tanishi: Unlike other accounts which have no fixed tenure except on violation of the conditions on the basis of which such accounts get opened; SNRR account has life span of 7 years from the date of opening of such account. If the tenure of the contract or the business operation ceases before 7 years, then this account also ceases within that tenure and in no situation, can have shelf life greater than 7 years from the date of opening.


Janya: Is there any relaxation to maximum tenure of 7 years of SNRR A/c

Tanishi: RBI approval is required for any renewal beyond 7 years. Also, there is no restriction on SNRR a/cs opened for investment in India.


Janya: Can I transfer funds from my NRO a/c to SNRR a/c

Tanishi: No, the transfer of funds from NRO to SNRR a/c is prohibited since SNRR transactions pertain specifically to the business for which SNRR account is opened.


Janya: Can the SNRR account holder give funds in foreign exchange to resident Indian.

Tanishi: No, the operations in the SNRR account should not result in the account holder making available foreign exchange to any person resident in India against reimbursement in rupees or in any other manner.


Disclaimer: The contents of this article are for information purposes only and do not constitute an advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up.  The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that Author / TaxGuru is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof. This is not any kind of advertisement or solicitation of work by a professional.

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May 2021