Why Financial Planning?

Planning is bringing the future into the present so that you can do something about it NOW.

NRIs stay outside India & face challenges in managing their assets in India – they have a couple of options to manage their accounts here. So what should be preferred – Power of attorney, joint account or a mandate holder in bank account?

Who is a Mandate Holder in an NRE/NRO account?

A Non Resident Indian (NRI) who has an NRE/NRO account can appoint a resident Indian as a mandate holder. The mandate holder can manage the account on behalf of the NRI.

The resident Indian has to be a close relative (family member). The mandate holder cannot be a company or a minor. One account can have only one mandate holder.

mandate holder in bank account

Why should an NRI appoint a mandate holder?

The NRI is outside the country most of the time. Sometimes there are financial matters that need physical presence. Many times, the family members need cash urgently and cannot wait for the NRI to transfer cash etc. In such cases, the mandate holder can act on behalf of the NRI and perform the transactions.

Read NRI joint account with Resident Indian

What are the rights of a Mandate Holder?

The mandate holder can carry out day-to-day banking transactions like withdrawing money for local payments, drawing cheques for local disbursements, manage FDs, make investments suitable for NRIs. The NRI can set up a limit on the maximum amount a mandate holder can debit from the account. The mandate holder can also deposit money in the account.

What is a Mandate Holder not allowed to do?

A mandate holder does not have the right  to –

  • Open or close an NRI account.
  • Change key details such as name and address in the account.
  • Transfer funds outside of India except to the NRI account holder.
  • Transfer funds as gift to any one.

“NRI can also ask the bank to issue an ATM card and cheque book to the mandate holder.” wiseNRI

What are the steps to register a Mandate Holder for an NRE/NRO account?

Most banks allow registering a mandate holder. The following steps broadly cover the process of registering a mandate holder. You need to check with your particular bank to find out the exact process and documentation

Steps to Register a Mandate Holder –

  • Get the appointment form either from the branch or the bank’s website. For example, here are the links for the mandate form –
    • ICICI Bank – Here
    • HDFC Bank – Here
  • Complete the form with signatures of all account holders.
  • Mandate holder submits the form along with KYC details, photographs of mandate holder and self-attested copies of identity proof and address proof of the mandate holder. The copies need to be signed by the account holders as well.
  • The bank approves of the appointment and registers the mandate. A cheque book and an ATM card is sent to the mandate holder.

How can a mandate be revoked?

The NRI has to submit a request in writing to the bank if the mandate on his NRE/NRO accounts has to revoked.

Read – Best time to send money to India

What is the difference between a mandate holder and a nominee?

A mandate holder operates the bank account on behalf of the NRI. He/She does not have any rights over the account. A nominee, on the other hand, is the person who will be eligible to claim the balance in the bank account when the account holder expires. The nominee is appointed by the account holder.

mandate holder meaning

What is the difference between a mandate holder and a power of attorney?

A mandate holder and the power of attorney have similar rights and responsibilities when it comes to the NRI’s bank account.

Are there any tax Implications on a Mandate Holder in his role of managing the NRI’s account?

The mandate holder does not have any tax implications as the mandate holder acts on behalf of the NRI. Whatever tax implications are there, they are the responsibility of the NRI and he must file his tax returns appropriately.

This post is written by Vidya – she is an NRI.

If you have any questions regarding “mandate holder in bank account” – add that in the comment section.

mandate holder in bank account
Published on 

Hemant Beniwal

Hemant Beniwal is a CERTIFIED FINANCIAL PLANNER and his Company Ark Primary Advisors Pvt Ltd is registered as an Investment Adviser with SEBI. Hemant is also a member of the Financial Planning Association, U.S.A and registered as a life planner with Kinder Institute of Life Planning, U.S.A. He started his Financial Planning Practice in 2009 & is among the first generation of financial planners in India. He also authored Bestseller book "Financial Life Planning". 

  • I am a mandate holder for my husband’s NRI a/c in India. Can I break an NRE FD and transfer the maturity amount into his NRI a/c?

  • As per Income tax rules if a customer does not have PAN then Form 60 is to be obtained for booking FD above Rs. 50000. In case if a mandate holder books an FD on behalf of NR customer who does not have PAN, then can the mandate holder sign form 60 on behalf of the customer.

  • I have filed a criminal complaint against the mandate holder who issued a cheque against the payment and the same was dishonored on presentation in my bank. Now the judge is asking whether he is guilty or not. need some help in this regard.

  • Can a mandate holder and account holder can operate account simultaneously or if mandate is given only mandate holder can transaction the account

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