Any NRI (Non-Resident Indian) has two options while opening a bank account in India i.e. an NRE (Non-Resident External) or an NRO (Non-Resident Ordinary) account.

A Non-Resident External (NRE) account is a bank account that’s opened by depositing foreign currency at the time of opening a bank account. This currency can be tendered in the form of traveler’s checks or notes. Whereas a Non-Resident Ordinary (NRO) account, is the normal bank account opened by an Indian going abroad with the intention of becoming an NRI. NRO account can also be opened by sending remittances by NRI from his residing country or by transferring funds from his other NRO account. It offers the same facilities as an NRE account, except that any repatriation done through this account should be reported to RBI by filling up prescribed forms.

Non Resident Indians (NRIs) / Person of Indian Origin (PIOs) being Indian Citizens as also foreign citizens of Indian origin can open foreign currency deposit accounts under Foreign Currency (Non-Resident) Accounts (Banks) Scheme. FCNR (B) Account or Foreign Currency Non-Resident Bank Accounts are similar to any NRE account except that the funds are held in foreign currency. These accounts can only be maintained in the form of term deposits. FCNR (Bank) accounts are only in the form of term deposits of 1 to 5 years.

Below is a quick comparison between NRE, NRO and FCNR (Bank) accounts

## NRE / FCNR Accounts opened / held jointly with resident close relative (relative as defined in Section 6 of the Companies Act 1956), can be operated only on ‘Former or Survivor’ basis. The resident close relative will 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.

** A resident power of attorney holder cannot open an NRE/NRO/FCNR account on behalf of an NRI. But the resident power of attorney holder can make local, rupee payments on behalf of the NRI.

^^ On the return of account holders in India, deposits may be allowed to continue till maturity at the contracted rate of interest, if so desired by an NRI. However, excepts the provisions relating to rate of interest and reserve requirements as applicable to FCNR(B) deposits, for all other purposes such deposits shall be treated as resident deposits from the date of return of the account holder to India.

Comparison between NRE, NRO and FCNR Bank accounts

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