Non Resident External Accounts (NRE) are accounts that are opened by Non Resident Indians (NRIs) and there are some restrictions on what resident Power of Attorney Holders on behalf of NRIs can and cannot do while operating these accounts.
It's important to note that a resident Power of Attorney holder in India on behalf of a NRI cannot open and close NRE accounts. This means that the NRI has to do the same himself and cannot assign the task to the Power of Attorney holder.
Also, resident Power of Attorney holders can operate the NRE account with certain restrictions. Among the freely allowed operations is to facilitate local payments. In case where the account holder is eligible to make investments in India, the resident Power of Attorney holder may be permitted by authorised dealer branch to operate the account to facilitate such investments.
Another important question that arises is: Can a resident Power of Attorney holder repatriate funds held in the NRE account out of India? The answer is no.
The resident Power of Attorney holders are not be allowed to repatriate outside India funds held in the NRE account under any circumstances other than to the account holder himself nor to make payment by way of gift to a resident on behalf of the account holder or transfer funds from the account to another NRE account.
A Resident Power of Attorney holder is also not allowed to credit proceeds of foreign currency notes, bank notes and travelers cheques to the NRE account.
Clearly, there are restrictions on the limitations of the use of the NRE Account by the Resident Power of Attorney Holder.