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RBI Guidelines - NRE I
NON-RESIDENT (EXTERNAL) RUPEE ACCOUNT SCHEME (NRE ACCOUNT)
Eligibility
The non-resident Indians (NRIs) are permitted to open and maintain NRE accounts with authorized dealers and with banks (including cooperative banks) authorized by the Reserve Bank to maintain such account.
Note : The account should be opened by the non-resident account holder himself and not by the older of the power of attorney in India or joint account holder.
Opening of accounts in the names of individuals/ entities of Bangladesh/Pakistan nationality/ ownership.
Opening of NRE accounts in the names of individuals/ entities of Bangladesh/ Pakistan nationality/ ownership requires approval of Reserve Bank.
Types of accounts:
The accounts may be maintained in any form, e.g. savings, current, recurring or fixed deposit account etc.
Permitted Credit
  1. Proceeds of remittances to India in any permitted currency.
  2. Proceeds of personal cheques drawn by the account holder on his foreign currency account and of travelers cheques, bank drafts payable in any permitted currency including instruments expressed in Indian rupees for which reimbursement will be received in foreign currency, deposited by the account holder in person during his temporary visit to India, provided the authorized dealer/bank is satisfied that the account holder is still resident outside India, the travellers' cheques/drafts are standing/ endorsed in the name of the account holder and in the case of travellers' cheques, they were issued outside India.
  3. Proceeds of foreign currency/ bank notes tendered by account holder during his temporary visit to India.
Provided –
  1. the amount was declared on a Currency Declaration Form (CDF), where applicable and
  2. the notes are tendered to the authorized dealer in person by the account holder himself and the authorized dealer is satisfied that account holder is a person resident outside India.
  1. Transfers from other NRE/FCNR accounts.
  2. Interest accruing on the funds held in the account.
  3. Interest on Government securities and dividend on units of mutual funds, provided the securities/ units were purchased by debit to the account holder's NRE/FCNR account or out of inward remittance through normal banking channels.
  4. Maturity proceeds of Government securities including National Plan/Savings Certificates as well as proceeds of Government securities and units of mutual funds sold on a recognized stock exchange in India and sale proceeds of units received from mutual funds, provided the securities/ units were originally purchased by debit to the account holder's NRE/FCNR account or out of remittances received from outside India in free foreign exchange.
  5. Refund of share/ debenture subscriptions to new issues of Indian companies or portion thereof, if the amount of subscription was paid from the same account or from other NRE/FCNR account of the account holder or by remittance from outside India through normal banking channels.
  6. 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, if any (net of income tax payable thereon), provided the original payment was made out of NRE/FCNR account of the account holder or remittance from outside India through normal banking channels and the authorized dealer is satisfied about the genuineness of the transaction.
  7. Any other credit if covered under general or special permission granted by Reserve Bank.
  8. As a measure of liberalization and also to meet the genuine needs of the NRE account holders, Reserve Bank has permitted the AD Category-I banks and authorized banks to credit proceeds of a/c payee cheques in addition to the demand drafts/ bankers' cheques issued against encashment of foreign currency to the NRE account of the NRI account holder where the instruments issued to the NRE account holder are supported by encashment certificates issued by AD Category-I/ Category-II.
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