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Query on difference between NRE account and NRO account

Anil (1638 Points)

12 June 2009

Can anyone please explain the difference between NRE account and NRO account?

Thanks

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3 Replies

Sourabh Sharma (CS CA (Final) M.com NCFM Derivative Capital Market Mutual Funds) (771 Points)
Replied 12 June 2009

NRE account is a repatriable Rupee account. It can be opened with either funds remitted form abroad or local funds which can be remitted abroad.

NRO account is a non-repatriable Rupee account and can be opened in with funds either remitted from abroad or generated in India, all bank accountsin India for NRIs/ Indians Overseas will be redesigned as NRO Accounts. Amount once transferred to NRO account will become non-repatriable.

Funds remitted from abroad or local funds, which can otherwise be remitted abroad to the account holder, can be credited to NRE Accounts. Local funds, which do not qualify for remittance outside India, are required to be credited to NRO accounts.

Funds can be freely transferred from NRE account to NRO account, but No funds can be transferred from NRO account to NRE account.

Money once credited into NRO account cannot betransferred back to NRE account.

When a resident becomes non-resident Indian their existing bank account in India become NRO Account