NRE account: All you need to know about crediting and debiting through this account

Plenty of individuals who have settled abroad, look for opportunities to invest back home. There are plenty of options available in the market, with the NRI accounts being one of the most popular options.

Additionally, within the NRI account, the non – resident external account has been one of the most favorable ones. This NRE account can be used as savings, current, recurring, or fixed deposit accounts, and depending on your financial needs. It also permits the account holder to invest and hold foreign currency. To make the most of this account here is what you need to be aware of:

What are the permitted credits to the account?

The following factors are permitted as credits to the account:

• The proceed of remittance in any currency is permitted to India.
• If the account holder is one a temporary visit to India, the proceed of personal cheques drawn on his foreign currency accounts, bank drafts or travelers cheques may be credited.
• The traveler’s cheques must be issued outside India. Alternatively, the bank drafts should be standing or endorsed in the name of the account holder.
• The proceed of the foreign currencies or bank noted tendered by the account holder should be supported by a currency declaration form whenever applicable.
• Any transfer from another NRE or FCNR account is permitted
• Any interest that is accrued on the funds within the account can be credited in the account.
• The interest accrued on government securities or dividends can be credited to the account. However, it must be proven that the securities or units that were purchased by debit, and deposited in the account holders NRE or FCNR account. Alternatively, it must also be proven that it was an out of inward remittance through normal banking channels.
• The maturity proceeds of government securities can be deposited in the NRE account. However, they must be proven that they were originally purchased by debit, to the account holder’s NRE or FCNR account. Alternatively, it must also be proven that it was an out of inward remittance received in a free foreign exchange from outside India.

What are the permitted debits to this account?

The following factors are permitted as debits from the account:
• Local disbursements can be permitted as debits
• Remittances from outside India can be permitted as debits
• The transfer of funds to NRE or FCNR accounts of the account holder, or any other person that holds the power of attorney to the account.
• Investments in the form of shares, securities, or commercial paper of an Indian company can be debited. Funds can also be debited from this account for the purchase of immovable property within India, provided that the purchase is made in accordance with the regulations granted by the Reserve Bank of India.


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