Non Resident (External) [ NR(E) ] are governed by the provisions of Foreign Exchange Management (Deposit) Regulations, 2000.A Non Resident External account (NRE Account)can be opened and maintained by a citizen of India or a person of Indian origin (PIO) residing outside India as also Overseas Corporate Bodies (OCBs). NRE accounts are convertible / repatriable and these are  maintained in Indian rupees in the form of savings, current and recurring or fixed deposit accounts. 

The Non-resident Indians (NRIs)are permitted to open and maintain these accounts with authorised dealers, and with banks (including cooperative banks) authorised by the Reserve Bank to maintain such NRE accounts.The account should be opened by the non-resident account holder himself and not by the holder of the power of attorney in India.

Note: Opening of NRE accounts in the names of individuals/entities of Bangladesh/Pakistan nationality/ownership requires approval of Reserve Bank.

• Proceeds of remittances to India in any permitted currency.
• Proceeds of personal cheques drawn by the NRE account holder on his foreign currency account and of travellers cheques, bank drafts payable in any permitted currency including instruments expressed in Indian rupees for which reimbursement will be received in foreign currency, deposited by the NRE account holder in person during his temporary visit to India, provided the authorised dealer/bank is satisfied that the NRE account holder is still resident outside India, the travellers' cheques/drafts are standing/endorsed in the name of the NRE account holder and in the case of travellers' cheques, they were issued outside India.
• Proceeds of foreign currency/bank notes tendered by NRE account holder during his temporary visit to India, provided (i) the amount was declared on a Currency Declaration Form (CDF)Form where applicable, and (ii) the notes are tendered to the authorised dealer in person by the NRE account holder himself and the authorised dealer is satisfied that account holder is a person resident outside India.
• Transfers from other NRE/FCNR accounts.
• Interest accruing on the funds held in the NRE account.
• Interest on Government securities and dividend on units of mutual funds, provided the securities/units were purchased by debit to the account holder's NRE/FCNR account or out of inward remittance through normal banking channels.
• Maturity proceeds of Government securities including National Plan/Savings Certificates as well as proceeds of Government securities and units of mutual funds sold on a recognised stock exchange in India and sale proceeds of units received from mutual funds, provided the securities/units were originally purchased by debit to the account holders's NRE/FCNR account or out of remittances received from outside India in free foreign exchange.
• Refund of share/debenture subscriptions to new issues of Indian companies or portion thereof, if the amount of subscription was paid from the same account or from other NRE/FCNR account of the account holder or by remittance from outside India through normal banking channels.
• Refund of application / earnest money / purchase consideration made by the house building agencies / seller on account of non-allotment of flat / plot / cancellation of bookings / deals for purchase of residential / commercial property, together with interest, if any (net of income tax payable thereon), provided the original payment was made out of NRE / FCNR account of the account holder or remittance from outside India through normal banking channels and the authorised dealer is satisfied about the genuineness of the transaction.
• Any other credit if covered under general or special permission granted by Reserve Bank.

• Local disbursements .
• Remittances outside India.
• Transfer to NRE/FCNR accounts of the account holder or any other person eligible to maintain such account.
• Investment in shares/securities /commercial paper of an Indian company or for purchase of immovable property in India provided such investment/purchase is covered by the regulations made, or the general/special permission granted, by the Reserve Bank.
• Any other transaction if covered under general or special permission granted by the Reserve Bank

Joint accounts - Joint accounts in the names of two or more non-resident individuals may be opened provided all the account holders are persons of Indian nationality or origin. 

Operations by Power of attorney - Authorized dealers/authorized banks may allow operations on an NRE account in terms of Power of Attorney or other authority granted in favour of a resident by the non-resident account holder, provided such operations are restricted to withdrawals for local payments or remittance to the NRE account holder himself through normal banking channels. In cases where the NRE account holder or a bank designated by him is eligible to make investments in India, the Power of Attorney holder may be permitted by the authorized dealers/banks to operate the account to facilitate such investment. The resident Power of Attorney holder shall not, however, be allowed to repatriate outside India funds held in the NRE account under any circumstances other than to the NRE account holder himself, nor to make payment by way of gift to a resident on behalf of the NRE account holder or to transfer funds from the  NRE account to another NRE account.

Special Series of Cheques - For easy identification and quicker processing of cheques drawn on NRE accounts, authorised dealers/banks shall issue cheque books containing a special series of cheques to their constituents holding NRE accounts.

Temporary overdrawings - Authorised dealers/authorised banks may at their discretion/commercial judgement allow for a period of not more than two weeks, overdrawings in NRE savings bank accounts, upto a limit of Rs.50,000 subject to the condition that such overdrawings together with the interest payable thereon are cleared/repaid within the said period of two weeks, out of inward remittances through normal banking channels or by transfer of funds from other NRE/FCNR accounts.

Remittances abroad by Resident nominee - Application from a resident nominee for remittance of funds outside India for meeting the liabilities, if any, of the deceased account holder or for similar other purposes, should be forwarded to the Reserve Bank for consideration.

Tax Exemption - Income from interest on balances standing to the credit of NRE Accounts is exempt from Income Tax. Likewise balances held in such NRE accounts are exempt from wealth tax.