NRE Account Credit: Account Payee Cheques Now Allowed
Current · Source: Reserve Bank of India · RBI/2008-09/276 · issued 10 Nov 2008 · ~1 min read
Quick answerRBI now permits AD Category-I banks to credit NRE accounts using account payee cheques from foreign currency encashment, in addition to demand drafts and bankers' cheques, provided an encashment certificate is issued.
The rule, in the simplest words
Banks can now put money from account payee cheques (cheques that can only be paid into the named person's bank account) into NRE accounts (special accounts for Indians living abroad).
This is allowed only if the cheque comes from exchanging foreign money (like dollars or pounds) and the bank gives a special paper called an 'encashment certificate' (proof that the foreign money was changed).
Before this rule, banks could only use demand drafts (a type of guaranteed cheque) or bankers' cheques for this; now account payee cheques are also okay.
Banks must tell their customers about this new rule so everyone knows they can use more types of cheques.
How it plays out — a real example
Ravi, a forex & trade-finance officer in Mumbai, gets a call from an NRI customer who wants to deposit an account payee cheque from selling foreign currency. Ravi checks the encashment certificate from another bank, then credits the NRE account, making the customer happy because they don't need to get a demand draft anymore.
What changed
Previously, only demand drafts or bankers' cheques issued against foreign currency encashment could be credited to NRE accounts. This circular extends the facility to include account payee cheques as well, subject to the same supporting encashment certificate requirement.
What it means for you
Banks can now process NRE account credits more flexibly, accepting account payee cheques alongside existing instruments. This reduces friction for NRIs converting foreign currency, as they can use a broader range of instruments. Banks should bring the contents of this circular to the notice of their constituents.
What you must do
Update internal guidelines to allow crediting of account payee cheques to NRE accounts when supported by an encashment certificate.
Train staff on verifying encashment certificates from AD Category-I or Category-II banks for such cheques.
Communicate this change to NRI customers and relevant branches to ensure smooth processing.
Who it affects
AD Category-I banks, Authorised banks, NRI account holders with NRE accounts
❓ Common questions
What instruments can now be credited to NRE accounts under this circular?
In addition to demand drafts and bankers' cheques, account payee cheques issued against foreign currency encashment can now be credited, provided an encashment certificate from an AD Category-I or Category-II bank is presented.
Is an encashment certificate still required for these new instruments?
Yes, the circular explicitly states that the account payee cheque must be supported by an encashment certificate issued by an AD Category-I or Category-II bank.
📜 Read the original circular — full text as issued by RBI
RBI/2008-09/276
A.P. (DIR Series) Circular No.34
November 10, 2008
To
All Category - I Authorised Dealer Banks and Authorised Banks
Madam / Sir,
Foreign Exchange Management (Deposit) Regulations, 2000
Credit to Non Resident (External) Rupee Accounts - Clarification
Attention of Authorised Dealer Category - I (AD Category-I) banks and Authorised Banks is invited to A.P.(DIR Series) Circular No.45 dated May 30, 2008 on the captioned subject. In this connection, it is clarified that AD Category-I banks and authorised banks may credit proceeds of account payee cheques also in addition to demand drafts / bankers' cheques, issued against encashment of foreign currency to the NRE account of the NRI account holder where the instruments issued to the NRE account holder are supported by encashment certificate issued by AD Category-I / Category-II.
2. AD Category-I banks and authorised banks may bring the contents of this circular to the notice of their constituents concerned.
3. The directions contained in this circular have been issued under Section 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.
Yours faithfully,
Salim Gangadharan
Chief General Manager-in-Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2008-09/276 · issued 10 Nov 2008. The plain-English explanation above is BankPulse’s own independent summary.
Communicate this change to NRI customers and relevant branches to ensure smooth processing.
📜 Compliance
Update internal guidelines to allow crediting of account payee cheques to NRE accounts when supported by an encashment certificate.
Train staff on verifying encashment certificates from AD Category-I or Category-II banks for such cheques.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are a Compliance officer at a bank this circular applies to (AD Category-I banks, Authorised banks, NRI account holders with NRE accounts), your first concrete step on “NRE Account Credit: Account Payee Cheques Now Allowed” is: “Update internal guidelines to allow crediting of account payee cheques to NRE accounts when supported by an encashment certificate.” (RBI issued this 10 Nov 2008).
Action required: Update internal guidelines to allow crediting of account payee cheques to NRE accounts when supported by an encashment certificate.
Action required: Train staff on verifying encashment certificates from AD Category-I or Category-II banks for such cheques.
Action required: Communicate this change to NRI customers and relevant branches to ensure smooth processing.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=4624&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
Help us keep this accurate
Found an inaccuracy or have an improvement? Tell us. Every report is reviewed by our team before any change is made — nothing goes live unverified.
Public beta — plain-English informational summaries. Always verify against the official RBI source (circular number cited on every page) before making compliance, credit, treasury, audit, or operational decisions. · Join our WhatsApp channel ↗
BANKPULSE · FREE DAILY BRIEF
Get RBI updates for your role
Every important RBI update, decoded in plain English — for your career, exams & financial awareness.
We collect only your email, name and role, used solely to send your brief — never sold or shared. Withdraw anytime via the unsubscribe link in any email. Independent platform, not affiliated with the RBI. Information, not legal advice.
REPORT AN ERROR · BETA
Spotted an error? Earn 500 BankPulse Credits
Help us stay accurate. If your correction is verified true and approved by our founder, you earn 500 BankPulse Credits — redeemable when the platform monetises.
Reviewed by a human before any credit is awarded. We never change the site from crowd input without verification.
WANT A NEW FEATURE · BETA
What would make BankPulse more useful for you?
Tell us what to build next — a tool, a data view, a role page, anything. We read every suggestion.
Thank you — your ideas directly shape what we build.