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RBI Guidelines - NRE III
NON-RESIDENT (EXTERNAL) RUPEE ACCOUNT SCHEME (NRE ACCOUNT)
Joint Accounts
  1. Joint Account of Non-Resident Indians with Resident individuals
    Reserve Bank has now permitted Non-Resident Indian (NRI), as defined in FEMA Notification No.5, ibid, to open NRE/FCNR(B) account with their resident close relative (relative as defined in Section 6 of the Companies Act, 1956) on 'former or surviror' basis. The resident close relative shall be eligible to operate the account as a Power of Attorney holder in accordance with extant instructions during the life time of the NRI/PIO account holder.
  2. Joint Account of Resident Individual with Non-Resident Indians
    Reserve Bank has now permitted Resident Indians (NRI) to include non-resident close relative(s) (relatives as defined in Section 6 of the Companies Act, 1956) as a joint holder(s) in their resident bank accounts on 'former or surviror' basis. However, such non-resident Indian close relatives shall not be eligible to operate the account during the life time of the resident account holder.
Opening of account during temporary visit to India
An account may be opened in the name of an eligible NRI during his temporary visit to India against tender of foreign currency travelers cheques or foreign currency notes and coins tendered, provided the authorized dealer is satisfied that the person has not ceased to be a non-resident.
Operations by Power of Attorney
Authorized dealers/ authorized banks are permitted to allow operations on an NRE Accounts 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 or remittance to the account holder himself through normal banking channels. 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 the authorized dealers/ banks 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 other than to the account holder himself, nor to make payment by way of gift to a resident on behalf of the account holder or to transfer funds from the account to another NRE account.
Opening of account during temporary visit to India
An account may be opened in the name of an eligible NRI during his temporary visit to India against tender of foreign currency travelers cheques or foreign currency notes and coins tendered, provided the authorized dealer is satisfied that the person has not ceased to be a non-resident.
Special Series of Cheques
For easy identification and quicker processing of cheques drawn on NRE accounts, authorized dealers/ banks shall issue cheque books containing a special series of cheques to their constituents holding NRE accounts.
Temporary overdrawings
Authorized dealers/ authorized bakns may at their discretion/ commercial judgment allow for a period of not more than two weeks, overdrawings in NRE savings bank accounts, up to 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.
Remittances abroad by Resident nominee
Application from a resident nominee for remittance of funds outside India for meeting the liabilities, if any, of the deceased account holder or for similar other purposes, should be forwarded to the Reserve Bank for consideration.
Tax Exemption
Income from interest on balances standing to the credit of NRE Accounts is exempt from Income Tax. Likewise balances held in such accounts are exempt from wealth tax.
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