Current · Source: Reserve Bank of India · RBI/2011-12/536 · issued 07 May 2012 · ~2 min read
Quick answerRBI now permits NRIs/PIOs to transfer funds from NRO to NRE accounts up to USD 1 million per financial year, subject to applicable taxes. This reverses the earlier ban on such transfers, easing repatriation for non-residents.
The rule, in the simplest words
NRIs (Non-Resident Indians) and PIOs (People of Indian Origin) can now move money from their NRO (Non-Resident Ordinary) account to their NRE (Non-Resident External) account.
The maximum amount they can transfer in one financial year (April to March) is 1 million US dollars.
Before the transfer, the bank must make sure the customer has paid all taxes on that money, just like they would if sending it out of India.
Banks must check that the customer does not go over the 1 million dollar limit in a single year across all their transfers.
How it plays out — a real example
A forex & trade-finance officer in Mumbai, Priya, has a customer who is an NRI and wants to move ₹7 crore from his NRO account to his NRE account. Priya first checks the customer's tax payment proof, then verifies that he hasn't already used up his $1 million limit for this financial year. Once everything is in order, she processes the transfer, updating her bank's system to record the transaction against the annual ceiling.
What changed
Previously, transferring funds from an NRO account to an NRE account was not allowed. Now, NRIs can move up to USD 1 million per financial year from NRO to NRE accounts, provided taxes are paid as if the funds were remitted abroad. The credit to the NRE account is treated as an eligible credit under the existing FEMA deposit regulations.
What it means for you
Banks must update their systems to process NRO-to-NRE transfers within the USD 1 million ceiling, ensuring tax compliance. This change simplifies repatriation for NRIs, potentially increasing NRE account inflows and reducing NRO balances. Lenders should verify tax payments and monitor per-financial-year limits to avoid regulatory breaches.
What you must do
Update internal procedures to allow NRO-to-NRE transfers up to USD 1 million per financial year.
Ensure tax deduction at source or tax payment proof is obtained before processing transfers.
Train staff on the new eligibility criteria and documentation requirements for such transfers.
Monitor customer accounts to prevent exceeding the annual ceiling across all transactions.
Who it affects
All Authorised Dealer banks, All Authorised banks, NRI and PIO customers with NRO and NRE accounts
❓ Common questions
What is the maximum amount I can transfer from NRO to NRE account per year?
You can transfer up to USD 1 million per financial year, subject to payment of applicable taxes.
Do I need to pay tax on the transferred amount?
Yes, tax must be paid as applicable, similar to if the funds were remitted abroad. Ensure you provide proof of tax payment to your bank.
Is this transfer allowed for all NRIs?
Yes, as per the definition in FEMA deposit regulations, all NRIs are eligible, subject to the overall ceiling and tax compliance.
📜 Read the original circular — full text as issued by RBI
RBI/2011-12/536
A. P. (DIR Series) Circular No.117
May 07, 2012
To
All Authorised Dealer banks and Authorised banks
Madam/Sir,
Transfer of Funds from Non-Resident Ordinary (NRO) account to Non-
Resident External (NRE) Account
The Committee to Review the Facilities for Individuals Under FEMA, 1999 (Chairperson : Smt. K.J.Udeshi) has recommended that the NRIs/PIOs may be permitted, subject to payment of applicable taxes, to transfer repatriable funds from their NRO account within the overall ceiling of US $ 1 million per financial year, for credit to their NRE account in India. At present transfer of funds from NRO to NRE account is not permissible.
2. On a review, it has been decided that henceforth NRI as defined in Foreign Exchange Management (Deposit) Regulations, 2000 contained in Notification No. FEMA.5/2000-RB dated 3rd May 2000 , as amended from time to time, shall be eligible to transfer funds from NRO account to NRE account within the overall ceiling of USD one million per financial year subject to payment of tax , as applicable (i.e. as applicable if funds were remitted abroad). Such credit of funds to NRE account shall be treated as eligible credit in terms of paragraph 3(j) of Schedule-1 of Notification No. FEMA.5/2000-RB dated 3rd May 2000.
3. All Authorised Dealer banks and Authorised banks may bring the contents of this circular to the notice of their constituents and customers concerned.
4. The directions contained in this circular have been issued under Sections 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,
(Rudra Narayan Kar)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2011-12/536 · issued 07 May 2012. The plain-English explanation above is BankPulse’s own independent summary.
Example: if you are a Compliance officer at a bank this circular applies to (All Authorised Dealer banks, All Authorised banks, NRI and PIO customers with NRO and NRE accounts), your first concrete step on “NRO to NRE Fund Transfer Allowed Up to $1 Million” is: “Update internal procedures to allow NRO-to-NRE transfers up to USD 1 million per financial year.” (RBI issued this 07 May 2012).
Circular: RBI/2011-12/536 -- NRO to NRE Fund Transfer Allowed Up to $1 Million
Issued: 07 May 2012
Action required: Update internal procedures to allow NRO-to-NRE transfers up to USD 1 million per financial year.
Action required: Ensure tax deduction at source or tax payment proof is obtained before processing transfers.
Action required: Train staff on the new eligibility criteria and documentation requirements for such transfers.
Action required: Monitor customer accounts to prevent exceeding the annual ceiling across all transactions.
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 03 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=7180&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.