NRIs can transfer fund from NRO to NRE account: RBI

The Reserve bank of India on Monday said that Non Resident Indian (NRI's) can be transfer funds from Non Resident Ordinary (NRO) to Non Resident External (NRE) accounts.

"On a review, it has been decided that henceforth NRIs shall be eligible to transfer funds from NROaccount to NRE account from within the overall ceiling of $1 million per financial year subject to payment of tax," RBI said in a notification.

This decision was taken after K J Udeshi committee recommendation to facilitate persons under Foreign Exchange Management Act (FEMA), 1999, RBI said in the notification.

As per earlier rules, fund transfer was only allowed from NRE account to NRO account, but not the other way around.

NRE is a account where funds are remitted from abroad. While NRO account is to receive money in Indian currency.

RBI has also asked all authorised dealer banks and authorised banks to bring the changes in regulations to the notice of their constituents and customers.

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