NRIs Allowed to Transfer Funds from NRO to NRE Account: RBI

The Reserve Bank of India (RBI) allowed NRIs (Non-Resident Indians) to transfer funds from NRO (Non-Resident Ordinary) account to NRE (Non-Resident External) account from ceiling of $1 million in a financial year subject to payment of tax.

As per the existing regulation, transfer of funds from NRE a/c to NRO a/c is allowed but the other way is not allowed. So, this decision was taken based on the recommendations of K J Udeshi Committee in order to facilitate the persons under Foreign Exchange Management Act, 1999.

While an NRE account is opened to deposit the income from abroad whereas, an NRO account is for putting incomes of Indians. An NRI can become joint account holder in case of NRE accounts, whereas in NRO accounts both the resident and the NRI can become joint account holders.