Power of Attorney on NRI Accounts for Hassle Free Transactions
Any Non Resident Indian’s concern would be taking care of his/her family’s financial needs while he/she is staying abroad. There is an option available to address that concern. A simple approach is creating a Power of Attorney (PoA) on NRI accounts, which would authorise the person on whose name the power of attorney is issued, to make all the financial transactions.
This method is a big relief for the person abroad, as he/she can transfer the money to the account in India which the power of attorney holder can easily withdraw as and when required. It is a simple and hassle free process that does not require much paper work after the person has left the country.
What is a Power of Attorney?
- A Power of Attorney is a legal instrument which allows a person to give the authority to another person to act on his or her behalf as a legal representative and take financial decisions. This makes banking transactions easy in the actual account holder’s absence.
- With the power of attorney, you can easily deposit or withdraw money from the NRI’s bank account.
- It also authorizes a person to issue, endorse or accept cheques to/from any third person of any amount.
- One can also make drafts from this account on basis of attorney. With this legal document, you can take loans, make investments, transfer funds, and execute security agreements as may be necessary.
The NRI can deposit money from the country where he/she is residing and the holder of the attorney can carry out the transactions on his/her behalf in India.
Thus, a POA is a very useful instrument for banking transactions. Many banks have a pre-specified format, called mandate letter, that is issued with the form when you open an account. It can be issued to any resident person to operate the bank account on behalf of the NRI.
The PoA can be general or specific in nature. A general PoA will give unlimited powers to the holder while a specific PoA will allow the holder only to carry out some specific transactions.
The last thing to be done is to issue the POA to a reliable person and get the deed drafted from a competent lawyer. This way you can rest assured that your family is being taken care of financially even though you are far away from them.