|Non-Resident External (NRE) Accounts for NRIs / PIOs
|Who can open NRE Accounts?
- Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs) are permitted to open these accounts with ADs. (RBI approval required for Bangladesh/ Pakistan individuals)
|Types of Accounts
||NRE accounts can be of following types: Current, Savings, Recurring, and Fixed Deposit.
- Remittances to India in any permitted currency.
- Deposited by the account holder in person on temporary visit to India:
- Personal Cheques drawn on the account holder’s foreign currency account
- Travellers cheques issued outside India
- Bank drafts payable in any permitted currency
- Instruments in Indian Rupees which are reimbursed in foreign currency
- FCY Notes / Bank Notes
- Subject to,
- the amount was declared on a Currency Declaration form (CDF) where applicable,
- AD is satisfied that the account holder is a person residing outside India.
- Transfers from other NRE / FCNR (B) accounts
- Interest accruing on the funds held in account
- Cheques issued by AD category I/II entities supported with encashment certificate towards encashment of foreign currency by NRI with them.
- Current income in India, subject to payment of applicable taxes in India.
- Following receipts for assets acquired by debit to the NRE/ FCNR account of the account holder:
- Maturity of sale proceeds of any permissible investment in India
- Refund of share / debenture subscriptions to new issues of Indian companies or portion thereof
- Refund of application / earnest money/ purchase consideration made by the house building agencies / Seller on account of non-allotment of flat / plot / cancellation of bookings / deals for purchase of residential / commercial property together with interest
- Any other credit, if covered under general or special Permission granted by Reserve Bank
- Local disbursements
- Remittances outside India
- Transfer to NRE / FCNR (B) accounts of account holder or any eligible person
- Investment in shares / securities / commercial paper of an Indian company
- Purchase of immovable property in India, provided the same is covered by Regulations/ general or special permission by RBI
- Any other transaction as permitted by RBI
|Change of Status to Resident
- When an NRE account holder returns to India with intention to stay for an uncertain period (for employment/ business/ vocation/ any other purpose):
- Accounts should be Re-designated as resident account, or
- Funds may be transferred to the Resident Foreign Currency (RFC) (if eligible for maintaining RFC a/c)
- Permitted to be opened in below cases:
- In the names of two or more NRIs or PIOs.
- With resident relative(s), as second holder, (eligible to operate as POA holder) on “former or survivor basis”
|Operations by Power of Attorney (POA)
- POA in favour of a resident permitted for:
- Making all local payments
- Remittance to the account holder abroad
- Investment in India
- POA not permitted for:
- Repatriation outside India other than to account holder
- Gift to a resident
- Transfer to another NRE account
- Interest on NRE deposits not taxable
- NRE deposits are exempted from wealth tax