Q1032. NRI can invest in mutual funds on repatriable or non-repatriable basis

Question: Sir, For mutual fund i give NRE account and select non repatriable option. Is there any issues if i select repatriable or non repatriable. Thanks

Answer: Investments in mutual funds can be made by either NRO or NRE account. The notable difference between NRE and NRO being that: Funds held in NRE account can be repatriated abroad freely by the account holder. Since NRE accounts are funded by money from abroad they are repatriable. Funds held in NRO account can also be funded from abroad, however they can also be funded from local sources within India. Since Rupee deposits from within India can be made in NRO accounts, funds held in NRO accounts are technically not repatriable. NRE funds can be remitted freely but to remit funds from NRO accounts rules and regulations applicable at the time of remittance must be adhered to before funds can be transferred abroad. Regarding your question, if a person selects an investment on a non-repatriable basis and funds from NRE account there should be no issue. There is no compulsion for those who invest on repatriable basis to repatriate! Basically for investments where repatriation is the aim, the funding is done through NRE or FCNR account with an Indian bank. On the other hand if repatriation is not a concern then funding can be done from NRO account. Your bank/broker should advise you of the best way to proceed.

Information by Virendar Chand