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Managing your NRI account through a mandate holder
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Know the importance of a mandate holder for an NRI
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Understand the rights and responsibilities of a mandate holder
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Learn the difference between nominee, joint holder, PoA and mandate holder
The below content is purely for informational purposes and is not intended to constitute advisory of any kind. The position reflected in this article has been updated as of November 15, 2023.
Non-Resident Indians (NRIs) can manage their finances from overseas in three ways - designating a Power of Attorney (PoA), opening a joint account, or appointing a mandate holder.
Sometimes there are time-sensitive financial matters and emergencies where an NRI’s family member may need funds urgently, when the NRI is not physically present in India. In such cases, appointing a trustworthy resident Indian as a mandate holder who can act on behalf of the NRI, and operate the Non-Resident External (NRE)/Non-Resident Ordinary (NRO) account can offer convenience and flexibility.
Typically, a mandate holder can carry out day-to-day financial operations of the NRE/NRO account on behalf of the NRI. It includes making local payments through debit card or cheque for NRIs among other uses. Registering a mandate is a quick and simple option for NRIs when it comes to operating their bank accounts
In this article, we will help you understand how to manage your NRI account through a mandate holder and their responsibilities and limitations.
Who can be a mandate holder?
You can choose any resident Indian as your mandate holder whom you deem as trustworthy and reliable. It is not necessary for the mandate holder to be a relative. Please note that ICICI Bank does not allow a company or a minor to be the mandate holder.
Did you know?
NRIs can appoint only one mandate holder per NRE/NRO account.
How to add a mandate holder for NRI accounts?
You can add a mandate holder to your account by submitting a mandate form along with the following documents of the proposed mandate holder to the bank:
- Passport size photograph;
- A valid ID proof such as copy of Passport/Aadhaar card with photograph of applicant, etc.;
- Self-attested address proof such as a Driving license/Aadhaar card/Voter's ID/Permanent Account Number (PAN) card etc.
The mandate form must have the signatures of all account holders as well as of the mandate holder.
To know more about acceptable identity and address proofs for ICICI Bank account holders, click here. ICICI Bank customers can appoint mandate holders to their NRI accounts using digital channels like iMobile Pay app and Internet Banking
Quick Tip
As a safeguard, NRIs have the option to set maximum limits on the amount that can be debited by the mandate holder from the account.
How can a mandate holder operate the NRI account?
Once the mandate holder is registered, he/she can request the bank to issue a cheque book and an ATM-cum-debit card in his/her name. The mandate holder can ask the bank to deliver these to his/her communication address.
What a mandate holder is permitted and not permitted to do
Please note, tables are best viewed on desktops and in landscape mode on mobile phones.
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The above table highlights what mandate holders of ICICI Bank accounts can and cannot do. However, you should consult your bank for further guidelines.
How to revoke a mandate?
The validity of a mandate holds good till it is revoked. There might be instances where you may want to appoint a new mandate holder. Here’s how you can revoke or change your mandate:
- You need to submit a request form, duly signed by all account holders and the mandate holder, to your bank.
- To update a new mandate holder for the account, you are required to submit the ‘Mandate Updation’ form. This form needs to be duly signed by the account holder(s), current mandate holder and the new mandate holder. The new mandate holder must submit documents mentioned above for verification.
Please note, policies may vary from bank to bank. You should consult with your bank to clearly understand the terms and conditions associated, documents required for appointing a mandate holder.
Conclusion
You can appoint a mandate holder to make banking in India easy while staying abroad. It’s an important responsibility and all account holders must jointly agree and sign the mandate form authorising the mandate. To protect your interests, you have the option to set transaction limits, change and revoke the mandate as well.
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Frequently Asked Questions
What are the tax implications of a mandate holder?
All tax liability associated with the account lies with the primary account holder. A mandate holder simply manages your account on your behalf and therefore there won’t be any tax implications him/her for financial transactions related to your account.
What is the difference between a power of attorney (PoA) and a mandate holder?
For meeting your banking needs, you can evaluate appointing a mandate holder in respect of your NRE/NRO account. While a mandate holder can be appointed by submitting a mandate form along with the underlying documents to the bank, appointment of a grantee through a PoA for managing your banking needs requires the document to be signed before a public notary and also stamped with the appropriate stamp duty. Also note that with respect to a mandate holder, various KYC documents are required to be submitted with the bank at the time of appointment. This is not the case with the PoA.
How are a mandate holder and a nominee different?
A mandate holder's authority is limited to the permitted banking operations, while a nominee is a person(s) who is entitled to receive the balance in your bank account after your demise, assuming that the account holder does not have any legal heir. In case the account holder has a legal heir, any amount received by a nominee can be claimed by the legal heirs of the deceased.
A mandate holder has the right to operate your account till the mandate is revoked, whereas a nominee has no right to operate your bank account during your lifetime.
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Disclaimer:
The contents of this article/infographic are meant solely for informational purposes. The contents are generic in nature and are not intended to serve as a substitute for specific advice on any matter whatsoever. The information is subject to updation, completion and verification and the applicable norms may keep changing materially from time to time. This information is also not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to applicable laws or would subject ICICI Bank Limited/its affiliates to any licensing or registration requirements. ICICI Bank Limited/its affiliates and their representatives shall not be liable for any direct or indirect losses or liability incurred arising in connection with any decision taken by any person on the basis of this content. Please conduct your own due diligence and consult your financial advisor before making any decision. Terms and conditions of ICICI Bank and third parties apply. ICICI Bank is not responsible for third party services. Nothing contained herein shall constitute or be deemed to constitute an advice, invitation or solicitation to avail any products/ services of third parties.
