NRE (Non-Resident External) Account FAQs

Yes. Banks allow the NRE deposits to continue till maturity at the contracted rate of interest, for the NRIs/PIOs, who return to India for permanent settlement.

Presently, banks are not allowed to grant fresh loans or renewing existing loans in excess of Rs 1 Crore (Rs.100 Lacs) against NRE deposits.

Yes. Banks allow premature withdrawal from NRE Fixed Deposit Account but usually with penalty.

Yes. DEBIT Card facility is available for NRE account holders on request by the account holder.

Yes. For this purpose, all the joint holders should submit a request.

No. It is not mandatory.

No. He can't open an NRE account but an NRO (current/ savings) account can be opened by a foreign national of non-Indian origin visiting India, with funds remitted from outside India through banking channel or by sale of foreign exchange brought by him to India.

Yes. However, these operations are restricted to withdrawals for local payments.

Loans against NRE fixed deposits are granted for investments in India on non-repatriable basis, in certain specified areas and for acquisition of flats/houses subject to prescribed conditions. The loan cannot be given for the purpose of re-lending, for investment in business of real estate, carrying on agricultural / plantation activities, acquisition of commercial property etc.

NRE accounts can be converted to resident accounts or the balances held in NRE account can be transferred to RFC accounts at the option of the account holder.

No. A resident Power of Attorney holder cannot open or close an NRE account on behalf of a NRI.

The Permissible Debits to NRE accounts are:

  1. Local payments.
  2. Remittances abroad.
  3. Transfer to NRE/FCNR (B) accounts of the same account holder.
  4. Transfer to NRE account of person other than the account holder subject to conditions.
  5. 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 of India.
  6. Any other transaction if covered under general or special permission granted by the Reserve Bank of India.

Yes. NRI account can be opened with zero balance by a person who is moving abroad for taking up an employment, business, vocation etc. Initially, he is required to complete the account opening formalities before going abroad with depositing any amount in his account. However, he needs to remit funds within a reasonable time to make the account operative.