Repatriating Money from NRE/NRO Accounts: How It Works

When an NRI moves to another country, it is likely that they will open either a Non Resident External (NRE) or Non Resident Ordinary (NRO) account for their funds.

Related Article: NRI Status Redefined by Income Tax Act of India

1.) In person from the bank from which the account was originally opened
2.) Online through the bank from which the account was originally opened.

Should the account holder choose to visit the branch to make the transaction, the repatriation must be done in his or her presence or through an attorney.

The balance of the NRE or NRO accounts can be made only to the account holders own account situated abroad, meaning the account holders name must be the same on both the NRE or NRO account and the foreign account in which the funds are being sent to. Repatriation of funds to a third party is not permitted.

Once the balance has been established from the account statement, the bank will then establish the foreign exchange conversion rate. The banks in India convert the same at the TT selling rate for the day, as has been advised by them through their head office. This will generally have the relevant exchange rate for the country of destination or the bank will give you a INR to USD conversion rate. While the bank can quote other currencies as well, they will generally quote the most relevant currencies such as USD, CAD, EUR, GBP, AED, AUD and NZD. 

Upon establishing the foreign exchange conversion rate, the bank will then check the country in which the funds are being sent to ensure that no transfers are being made from India to any FATF negative country or OFAC negative country, as per the guidelines set by the RBI. Once approved, the account holder will then be required to provide the bank with their six digit Sort Code for GBP transactions, IBAN # for all EUR transactions, 6 digit BSB # for all Australia transactions, Bank Code and Transit # for all CAD, and ACH or SWIFT code for all USD transactions. It is important to note that all repatriation transactions are subject to various taxes and service fees.

The service tax slabs that have been fixed by the government are as follows (these are subject to change from time to time):

• For Amount of Currency Exchanged(ACE) up to Rs.100,000 - 0.12% of ACE, minimum Rs.30/- .
• For Amount of Currency Exchanged(ACE) above Rs.100,000 up to Rs.1,000,000 - Rs.120 + 0.06% of incremental   amount above Rs.100,000 .
• For Amount of currency exchanged above Rs.1,000,000 - Rs.660 + 0.012% of amount above Rs.1000,000,   subject to maximum of Rs.6000 .

For liability reasons, the account holder will be required to provide the bank with their phone number, email address, home address, etc. and will be also have to sign a declaration at the time of the transaction stating that the sending bank will not be liable for any charges or taxes that the beneficiary bank may impose during the transfer.