Friday, January 22, 2016

Why and How to Appoint a Mandate Holder in NRE or NRO account?

Mandate Holder is a unique facility many private sector banks like ICICI and HDFC bank provides to NRI customers. According to this faculty, NRE/NRO account holder can appoint a resident Indian (a family member only) to manage your account on your behalf. Since, being an NRI, you cannot physically be present in India to handle your financial matters for most of the year, having a mandate holder really helps.


Many of my NRI friends has appointed their parents as mandate holders on their NRE and NRO account which allows them to access fund conveniently. They don't need to wait for any remittance every month because they have full access to NRE bank account. Let's see some more benefits and feature of appointing a mandate for your NRI accounts.



Facilities and Rights available to the mandate holder

A mandate holder has limited rights on your NRI account. He can issue cheques for local payments on behalf of the account holder, which is required for bill payments for Indian utility services like telephone internet or any other financial matter. Basically, a mandate holder can execute all instructions except the following:


  • He cannot open or close NRE fixed deposits or NRO fixed deposit.
  • He cannot Repatriate funds to anyone other than the account holder.
  • He cannot gift funds i.e. transferring fund to someone else's account as a gift.


So you are getting the benefit of local presence as well as you are protected as well.





How to register a Mandate Holder in NRE account

First, check with your bank whether they support mandate facility or not. I know that both ICICI bank and HDFC bank provides mandate facility on NRI accounts. In ICICI, to register a mandate holder for your account, you need to download the request form, fill it and send it to your proposed mandate holder. The Mandate Registration form has to be signed by both the account holder and the mandate holder.

The mandate holder then needs to visit an ICICI Bank branch and submit the request form along with the relevant documents.


Mandate holder is also required to submit a recent photograph and copies of relevant identity and address proofs along with the form. The photocopies of the documents have to be self-attested. Also, the original documents have to be carried for verification.
Here is a nice summary of benefits and what mandate holder can or cannot do on your behalf:

What mandate holder can do on behalf of NRI account holder

Most of the banks e.g. HDFC has a similar process but if you have any doubt you can always contact your bank's customer care or write them an email. You can also complete formalities when you visit India on your next vacation.


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