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Transfer of Funds from Non-Resident Ordinary (NRO) account to Non-Resident External (NRE) Account

Transfer of funds from NRO to NRE account was not permitted hitherto. On review of the facilities to residents, RBI has decided that henceforth NRI shall be eligible to transfer funds from NRO account to NRE account within the overall ceiling of USD one million per financial year subject to payment of tax, as applicable.

Such credit of funds shall be treated as eligible credit to NRE accounts.

In view of the foregoing, Banks will allow transfer of funds from Non-Resident Ordinary (NRO) accounts to Non-Resident External (NRE) accounts of NRIs subject to

a. The amount of transfer should be within the overall ceiling of USD one million per financial year available for repatriation from NRO account

b. Banks may permit such transfer subject to payment of tax as applicable (i.e. as applicable if funds were remitted abroad)

c. Such credit of funds to NRE accounts shall be treated as eligible credit.