Non Resident External (NRE)
Authorised dealers have been permitted to credit the proceeds of foreign currency
notes/travellers cheques brought by the account holder from abroad during
his visit to India provided they are tendered in person. Where the aggregate
value of the foreign exchange in the form of currency notes, bank notes
or traveller's cheques brought in by such person at any one time does
not exceed US$10,000 (US Dollars ten thousands) or its equivalent and/or
the aggregate value of foreign currency notes brought in by such person
at any one time does not exceed US$ 5,000 (US Dollars five thousands)
or its equivalent, it should have been declared to the Customs on the
Currency Declaration Form (CDF) at the time of the account holder's arrival
into India. Further, in the case of travellers cheques, they should be
presented by the account holder himself and discharged by him in the presence
of the official of the concerned bank.
NRE accounts
can't be opened by the power of attorney holder in India on behalf of
a non-resident. The account should be opened by Non Resident account holder
himself. Authorised dealers/authorised banks may allow operations on an
NRE account in terms of Power of Attorney or other authority granted in
favour of a resident by the non-resident account holder, provided such
operations are restricted to withdrawals for local payments. In cases
where the account holder or a bank designated by him is eligible to make
investments in India, the Power of Attorney holder may be permitted by
authorised dealers to operate the account to facilitate such investment.
The resident Power of Attorney holder shall not, however, be allowed to
repatriate outside India funds held in the account under any circumstances
or make payment by way of gift to a resident on behalf of the account
holder or transfer funds from the account to another NRE account.
Can
Power of Attorney holder credit proceeds of foreign currency notes/bank
notes and travellers cheques to the NRE accounts? No.
Balances
held in NRE accounts can be repatriated abroad freely, whereas funds in
NRSR and NRO account cannot be remitted abroad but have to be used only
for local payments in rupees. Consequently, funds remitted from abroad
or local funds which can otherwise be remitted abroad to the account holder
can only be credited to NRE accounts. Funds due to the non-resident accountholder
which do not qualify, under the Exchange Control regulations, for remittance
outside India are required to be credited to NRO accounts. The accountholders
can freely transfer funds from NRO/NRE/FCNR accounts to NRSR account but
transfer of funds from NRSR account to other accounts of NRI is not permissible
irrespective of the source of funds.
Permitted
Credits to NRE account -
- Proceeds
of remittances to India in any permitted currency.
- Proceeds
of personal cheques drawn by the account holder on his foreign currency
account and of travellers 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 authorised 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.
- Proceeds
of foreign currency/bank notes tendered by account holder during his
temporary visit to India, provided
- the
amount was declared on a Currency Declaration Form (CDF), where
applicable, and
- the
notes are tendered to the authorised dealer in person by the account
holder himself and the authorised dealer is satisfied that account
holder is a person resident outside India.
- Transfers
from other NRE/FCNR accounts.
- Interest
accruing on the funds held in the account.
- 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.
- 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 recognised 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 holders's NRE/FCNR account or out
of remittances received from outside India in free foreign exchange.
- 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.
- Refund
of application/earnest money made by the house building agencies on
account of non-allotment of flat/plot, 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 authorised dealer
is satisfied about the genuineness of the transaction.
- Any other
credit if covered under general or special permission granted by Reserve
Bank.
Permitted Debits to NRE Account -
- Local
disbursements .
- Remittances
outside India.
- Transfer
to NRE/FCNR accounts of the account holder or any other person eligible
to maintain such account.
- Investment
in shares/securities /commercial paper of an Indian company or for purchase
of immovable property in India provided such investment/purchase is
covered by the regulations made, or the general/special permission granted,
by the Reserve Bank.
- Any other
transaction if covered under general or special permission granted by
the Reserve Bank.
The funds
in your NRO/NRE/NRSR account can be utilised for payment of airfare to/from
and other travel related expenses in India. Airlines/shipping companies
and their agents have also been permitted to accept payments in rupees.
Authorised
dealers/authorised banks may at their discretion/commercial judgement
allow for a period of not more than two weeks, overdrawings in NRE savings
bank accounts, upto a limit of Rs. 50,000 subject to the condition that
such overdrawings together with the interest payable thereon are cleared/repaid
within the said period of two weeks, out of inward remittances through
normal banking channels or by transfer of funds from other NRE/FCNR accounts.
Can you take
a loan/overdraft against your NRO/NRE/NRNR account? Yes, except for the
purpose of relending, carrying on agricultural/plantation activities or
for investment in real estate business. Loans against NRE fixed deposits
can, however, be utilised for investments in India on non-repatriation
basis, in certain specified areas and for acquisition of flats/houses
subject to prescribed conditions. The rate of interest on such loans will
be as per the directive issued by Reserve Bank (Department Banking Operations
and Development) from time to time. The loans raised against NRE deposits
can be repaid out of funds held in NRO/NRSR accounts but in such cases,
the interest would be charged at commercial rate in force from time to
time.
You can designate
a nominee on your account. Remittance of funds to the non-resident nominee
from the deceased person's NRE account will be permitted by authorised
dealers.
Authorised
dealers can permit transfer of funds from the NRE account of one person
to the NRE account of another person. Authorised dealers can transfer
funds held with them in NRE account to the account of same person held
with another authorised dealer. Funds held in NRE account can also be
transferred to other authorised dealer for the purpose of opening NRE
account in the name of the same person provided a certificate confirming
the NRE status of the account from which funds are transferred is produced.
Transfer of funds by way of gift can be permitted by authorised dealer
after obtaining an undertaking from the transferee/transferee's bank that
gift tax rules/regulations have been complied with.
Remittances
for credit to rupee accounts (i.e. NRE/NRO/NRNR/NRSR accounts) maintained
by NRIs are converted at the market rate.
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