- Statement 1 is incorrect: NRE accounts can be opened by Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs). Overseas Corporate Bodies (OCBs) were permitted to open NRE accounts previously, but this facility was withdrawn by the Reserve Bank of India (RBI) in 2003. - Statement 2 is incorrect: Deposits into NRE accounts originate from funds remitted from outside India in freely convertible foreign currency or from balances in existing NRE/FCNR(B) accounts. However, the NRE account itself is maintained in Indian Rupees (INR). While the source of funds for deposit must be foreign currency (or balances in other NRE/FCNR accounts), the account balance is held and transactions are denominated in INR. The statement "Deposits in this account are allowed in any currency" is misleading as the account does not hold foreign currency balances; the funds are converted to INR upon deposit.
Which is correct about the opening of Non Resident External account in India? 1. NRE accounts can be opened by NRIs and OCBs (Overseas Corporate Bodies) with authorized dealers and banks in all the forms of demand and term deposits. 2. Deposits in this account are allowed in any currency.
Asked in GPSC Prelims CSP 2 2019 · Topic: Balance of Payments (BoP) (Components of BoP: Current Account (Goods, Services, Income, Transfers))
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