Joint account holder vs. mandate holder vs. Power of Attorney for NRIs – Who should handle your funds?

Handling finances in India while living abroad can’t always be done online. Some transactions require an in-person presence, and family members may be unable to withdraw funds when needed. Additionally, certain banking procedures, like document verification or cheque processing, can be difficult to complete remotely. If you have financial commitments in India, you may need a joint account holder, a Power of Attorney (POA) for an NRI or a mandate holder to assist with account operations.

Each option offers a different level of control. A mandate holder can only perform select banking transactions, while a joint account holder shares ownership in NRO accounts but has restricted access in NRE accounts. A Power of Attorney for an NRI grants broader control than other options but is still subject to regulatory limits and legal responsibilities. This article breaks down these choices, helping you determine the best way to manage your NRI account remotely.

Understanding the three options
 

An NRI savings account belongs to someone who lives outside India, but the money inside it exists in India. Since the account holder isn’t physically present, they may need someone else to operate it, whether to withdraw cash, issue cheques, or manage financial transactions.

This is where you can choose to designate a Power of Attorney for the NRI account, share your authority with a joint account holder, or appoint a mandate holder. Each option defines how much access the designated person has and what they can do with the account.

1. Power of Attorney for NRIs
 

A Power of Attorney for an NRI is a legal document that authorises another person, typically a trusted resident Indian, to operate the NRI’s account on their behalf. This is particularly useful when handling property transactions, investment decisions, or major banking tasks that require physical presence in India.

Types of NRI POA –

a. General POA – Grants broad financial and legal control.

b. Special POA – Limited to particular transactions (e.g., selling a property and managing investments only).

What can an NRI POA do?

a. Sell property, sign rental agreements, or make property-related payments

b. Invest in mutual funds, fixed deposits (FDs), or other financial instruments

c. Open, close, or modify bank accounts if authorised

d. Sign loan documents and manage large fund transfers

Limitations of a POA for NRIs –

a. Needs to be notarised in the NRI’s country of residence and attested by the Indian consulate

b. For NRE and FCNR(B) accounts, POA holders can only make local payments or remit funds to the NRI through banking channels, not to others

c. POA holders cannot repatriate funds outside India to anyone other than the NRI, make gift-transactions to residents, or transfer funds between NRE/NRO accounts

d. For NRO accounts, usage is restricted to local payments and remitting the NRI’s current income abroad (after taxes)

e. All activities must comply with RBI/FEMA guidelines and any limits or documentation prescribed by the bank

f. Some banks may have restrictions on using a POA for NRIs for withdrawals

g. Risk of misuse if granted to the wrong person

Best for – NRIs who need broad financial control in India, especially for selling property, managing rental agreements, making investments, or handling large financial transactions.

2. Mandate holder for an NRI account
 

A mandate holder is a person appointed by an NRI to operate their account as the bank permits. Unlike a POA, this authorisation applies only to banking transactions and does not extend to legal or investment decisions.

What can a mandate holder do?

a.  Withdraw cash from the account and issue cheques for utility payments or medical expenses

b. Pay bills, deposit funds, and handle routine transactions like insurance premiums or rent

c. Access the account to manage daily financial commitments, but without control over investments

Limitations of a mandate holder –

a. Cannot open, close, or modify the account

b. No investment or loan authority

c. Only valid for routine banking transactions as permitted by the bank (no property-related rights)

Best for – NRIs who need someone to manage routine transactions but want to retain full account ownership.

3.  The joint account holder for an NRI account

A joint account holder shares ownership of an NRI account, but the rules vary based on the account type.

a. NRO accounts can be jointly held with another NRI/PIO or with a resident Indian on a ‘Former or Survivor’ basis

b. NRE or FCNR(B) accounts can be held jointly only with

i. Another NRI/PIO, or

ii. A resident relative (as defined under Section 2(77) of the Companies Act, 2013) on a ‘Former or Survivor’ basis.

In such cases, the resident co-holder can only access the account after the NRI’s demise. During the NRI’s lifetime, the resident can operate the account only if separately authorised as a POA holder, and even then, only within RBI-defined limits.

For example, IDFC FIRST Bank permits a resident joint holder on NRE accounts only under the "Former or Survivor" mode.

What can a joint account holder do?

a. Withdraw funds, issue cheques, and make payments for shared household expenses or family needs (NRO accounts only)

b. Access all banking transactions, including automatic transfers and scheduled payments (NRO accounts only)

c. Ensure smooth succession planning in both NRO and NRE accounts, as the resident holder automatically gains access after the NRI’s demise

Limitations of an NRI joint account with a resident –

a. In NRE accounts, resident co-holders have no access during the NRI's lifetime unless holding a POA, and even then, only within regulatory limits

b. Full shared ownership in NRO accounts means the co-holder has equal rights over account funds, which may lead to disputes

c. Removing a joint holder requires fresh documentation and bank approval

d. If the co-holder mismanages funds, reversing transactions may be difficult

Best for – NRIs who want a family member to access their NRO account freely or to add a resident co-holder to an NRE account strictly for succession planning.

Each of these options provides a different balance of control and security. While a Power of Attorney for an NRI offers broad authority, it also comes with legal complexities. A mandate holder is a simpler alternative but has strict limitations on financial transactions. A joint account holder shares ownership in an NRO account with full operational rights. In an NRE account, a resident relative can only be added on a ‘Former or Survivor’ basis and may access funds only after the NRI’s demise. Choosing the right option depends on the level of access needed and the risks an NRI is comfortable with.

Comparison of Power of Attorney, mandate holder, and joint account holder
 

Which option fits your needs?
 

Choosing between a Power of Attorney for NRIs, a mandate holder, or a joint account holder depends on how much control you want to delegate. Use this checklist to assess which option works best for you.

If you answer "Yes" to any of these, consider a Power of Attorney for an NRI –

1. Do you need someone to sell, rent, or manage your property in India?
2. Do you want someone to invest in mutual funds, FDs, or shares on your behalf?
3. Do you need someone to sign loan documents or handle financial agreements in your absence?
4. Are you willing to grant broad authority over legal and financial matters?

If you answer "Yes" to any of these, consider appointing a mandate holder –

1. Do you just need someone to withdraw cash or issue cheques for daily expenses?
2. Do you need help with paying bills, insurance premiums, or rent in India?
3. Do you want someone to manage routine transactions without giving them investment or legal authority?
4. Do you want an option that’s easier to revoke than a POA?

If you answer "Yes" to any of these, consider opening a joint account between an NRI and a resident –

1. Do you want a family member to co-manage your finances while you’re abroad?
2. Do you need shared access to an account for household or business expenses?
3. Are you looking for a long-term financial arrangement rather than temporary access?
4. Do you want your spouse or children to inherit the account without legal hurdles?

How to set up a Power of Attorney, a mandate holder, or a joint account holder for an account
 

Now that you know the options, here’s how to set them up. Each requires specific steps and documentation.

1. Setting up a Power of Attorney for NRIs
 

a. Consult a lawyer to draft your POA, choosing General POA (broad authority) or Special POA (specific tasks like selling property)

b. Notarise and attest it in your country of residence via the Indian consulate or Apostille (a form of international certification)

c. Send the POA to India, where the POA holder submits it to the bank with KYC documents

d. The bank registers the POA before activating access, subject to restrictions

2. Setting up a mandate holder
 

a. Request a mandate holder form your bank

b. Review transaction limits before signing the agreement

c. Both you and the mandate holder sign in the presence of a bank official if required

d. Submit KYC documents, and the bank activates access after verification

3. Opening a joint account between an NRI and a resident
 

a. Choose an NRO or NRE account based on your needs

b. Complete and submit the joint account form as per the bank's requirements

c. Provide KYC documents for both account holders

d. The bank verifies and registers the joint holder before granting access based on the account type

Documents required for each option –

Banks may have additional requirements—always check in advance.

Best practices for choosing the right option
 

Choosing the right way to delegate account access balances convenience with security. Keeping these best practices in mind can help protect your finances while ensuring smooth account operations.

1. Grant access based on trust and necessity – A Power of Attorney for an NRI gives the broadest authority, so limit it to someone you trust completely. A mandate holder should only have access to essential transactions, and a joint account holder should be added only if shared ownership is truly needed.
2. Specify revocability in legal agreements – A POA should clearly state whether it is revocable or irrevocable to avoid complications. For sensitive transactions, opting for a Special POA with limited powers can reduce risks.
3. Monitor transactions regularly – Even with trusted individuals, review account activity periodically to ensure funds are being used appropriately. Some banks offer alert notifications for transactions—activate these for added security.
4. Ensure clarity in financial rights – If opening an NRI joint account with a resident, understand that the co-holder gains equal ownership in an NRO account. Clearly document financial responsibilities to avoid disputes.
5. Keep legal records updated – If circumstances change—such as a new POA holder or mandate holder—update the bank immediately to prevent unauthorised access. If revoking access, obtain written confirmation from the bank.

Clear legal documentation, defined permissions, and careful selection of account delegates will help you maintain both security and financial control.

Conclusion
 

NRIs managing finances in India must decide how much control to delegate. Whether it's through a Power of Attorney for NRIs, a mandate holder, or a joint account holder, each option serves different needs, from everyday transactions to long-term financial planning. Choosing wisely ensures security and convenience while maintaining control over your funds.

With an IDFC FIRST Bank NRI Savings Account, you get clear delegation options to match your requirements. Contact customer support anytime for guidance on choosing the right option for your account.

Disclaimer

The information provided in this article is intended for general awareness and does not constitute legal or financial advice. The rules governing joint account holders, mandate holders, and Power of Attorney (PoA) holders may vary based on account type, resident status, and bank-specific policies. Readers are advised to consult their bank or a qualified legal advisor before making any decisions regarding account operation or authorisation.