1. Non-resident (External) Rupee Account (NRE Accounts)
• NRE accounts can be opened and maintained by Non Resident Indians through any of the following modes:
(i) remittances from abroad by way of TT, checks, drafts, or even transfer from another Non-Resident account.
(ii) by tendering of foreign currency travellers cheques or notes by the NRI during his temporary visit to India, provided the bank is satisfied about his non-resident status.
• NRE account can be opened as Saving Bank account or Current Account, or Recurring Deposit Account or Term Deposit for a minimum period of one year.
• An NRI can open NRE accounts as Joint Accounts, in the name of two or more non-resident individuals. Such individuals could be of Indian nationality or Indian origin.
• Opening of NRE account, jointly with a person resident in India is not permitted.
• No lien is permitted to be marked on the balances held in NRE savings account.
The RBI has permitted the following important credits that can be put into the NRE accounts:
(a) Remittance to India in any permitted currency.
(b) Personal cheques drawn on foreign currency account of the account holder.
(c) Travellers cheques and bank drafts drawn in any permitted currency
(d) Foreign currency/bank notes tendered during his temporary visit.
(e) Transfer from any other NRE/FCNR (B) Accounts.
(f) Any other credit if covered under general permission or specific permission granted by Reserve Bank of India.
The following debits are freely permitted in the NRE accounts:
(a) Local disbursements/payments
(b) Remittance outside India
(c) Transfer to any NRE/FCNR(B) Account
(d) Investments in shares/securities, etc.
NRE accounts also, offer following other facilities to NRI depositor:
(a) A cheque book facility in saving or Current account is allowed.
(b) Full repatriation of deposit amount including interest permitted.
(c) Maturity proceeds can be transferred to another bank, as desired by the depositor.
(d) Nomination facility is permitted. Nominee can be either resident or non-resident.
(e) Income by way of interest on balances held in NRE account is exempted from income tax as on date.
(f) Residents Indian can operate the account on the basis of power of attorney granted by account holder. However the power of attorney holder cannot repatriate funds outside India.
(g) Banks may allow temporary overdrawing up to Rs.50,000/- (at present) in NRE saving account, to be adjusted within 2 weeks of availment.
Interest on NRE Deposits
Interest varies from time to time at the discretion of the respective banks.