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If any person who is Non-Resident wants to do bona fide transactions in India, then they have to open some special kind of accounts according to the procedure prescribed by Reserve Bank of India (RBI).

Types of account which can be opened by a Non-Resident in India:-

1. Non-Resident (External) Rupee Account Scheme [NRE A/c]

2. Foreign Currency (Non-Resident) Account (Banks) Scheme [FCNR (B) A/c]

3. Non-Resident Ordinary Rupee Account Scheme [NRO A/c]

Non-Resident (External) Rupee Account Scheme [NRE A/c]:

Q 1. Who can open NRE A/c?

Ans: 1. Any Non-Resident Indian (NRI) & Person of Indian Origin (PIO) without any approval of the RBI with Authorised Bank.

2. Individuals/Entities of Pakistan and Bangladesh shall require prior approval of the RBI.

Q 2. Can NRIs hold the account jointly with someone?

Ans: a. Two or more NRIs/PIOs may held/maintained the account jointly.

b. NRIs/PIOs can also hold the account jointly with a Resident Relative (defined as per Companies Act)

Q 3. In which form accounts may be maintained?

Ans: The accounts may be maintained in the form of Savings/Current/Recurring/Fixed  Deposit.

Q 4. Which type of currencies maintained in this account?

Ans: Indian Rupees as well as any permitted currency (which is freely convertible).

Q 5. What is the time period of Fixed Deposits?

Ans: Generally, time period of the Fixed Deposits is 1 to 3 years. However, Banks are  allowed to accept the deposits which exceeds 3 years from their Asset-Liability point of view.

Q 6. What is Permissible Debits?

Ans: Following type of debits which are permitted by RBI are below mentioned:

  • Local Disbursements
  • Remittance outside India
  • Transfer to another NRE/FCNR (B) accounts
  • Made investments in India (through shares/securities/commercial paper issued by Indian Company).

Q 7. Whether any exemption granted to the income earned in such account?

Ans: Yes, exemption is granted to those income which has earned in this account from income tax .

Q 8. Whether any loan facility available to the NR under the NRE A/c?

Ans: Yes, the Authorised Dealer can sanction loans to the account holder without any limit,  subject to usual margin requirements.

Condition imposed by the RBI:

  • Amount of loans cannot be repatriated outside India.
  • Loan Amount can be used only for specified purpose in India.

Q 9. What is the procedure for repayment of loan granted in such account?

Ans: Amount of loan can be repaid in three ways:

  • By adjusting the deposits or
  • Through inward remittances from outside India through the banking channels or
  • Out of the balances held in NRO Account of the account holder.

Q 10. Can the residential status be changed from the Non-Resident to the Resident?

Ans: NRE accounts should be designated as resident accounts or the funds held in these accounts may be transferred to the RFC accounts, at the option of the account holder, immediately upon the return of the account holder to India for taking up employment or on change in the residential status

——to be continued


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  1. Pragati123 says:

    Please note that NRE is only Indian Rupee Account. By mistake, I have mentioned foreign currency, kindly ignore the same.

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June 2024