E-Paper
Foreign Currency Accounts
Q. Can accounts be maintained by NRIs in foreign currencies? Ans. Yes. Accounts in foreign currencies (FCNR accounts) can be maintained by NRIs with authorised dealers in India.
Q. Can accounts be maintained by NRIs in foreign currencies?
Ans. Yes. Accounts in foreign currencies (FCNR accounts) can be maintained by NRIs with authorised dealers in India.
Q. What are the foreign currencies in which such accounts can be maintained?
Ans. FCNR Accounts permitted to be maintained in Pound Sterling, U.S. Dollar, Deutsche Mark and Japanese Yen.
Q. Is FCNR accounts permitted to be maintained in the form of current/savings accounts?
Ans. No. The FCNR accounts can be maintained only in the form of term-deposits, i.e. a deepest kept for fixed period ranging from 6 months to 3 years.
Q. What is the maximum period of maturity for a FCNR term deposit account?
Ans. The maximum period of maturity is three years.
Q. Is premature withdrawal of the FCNR term deposit allowed?
Ans. Yes. However, this is subject to the levy of a penalty.
Q. What is the penalty for premature withdrawal of a FCNR deposit?
Ans. Interest in such cases is paid at one per cent below the interest rate payable for the period for which the deposit is, however, payable only if they are kept for a minimum period of six months.
Q. If a FCNR deposit of 6 months maturity is withdrawn premature, would any interest be payable?
Ans. No. While the premature withdrawal would be allowed, no interest would be payable. For such premature withdrawals the bank may levy penalty as per their discretion.
Q. Are the interest rates on FCNR deposits liable for periodical revision?
Ans. Yes. The Banks have been permitted to offer interest on such deposits at rates not more than the LIBOR prevailing on the last working day of the previous week for the relevant maturity and currency. Subject to this guideline, banks can offer either fixed or floating rate of interest on such deposits.
Q. What about debits to FCNR accounts for local payments?
Ans. Debits for local payments in rupees are allowed freely.
Q. Are funds in FCNR accounts freely repatriable abroad?
Ans. Yes. Authorised dealers maintaining these accounts would allow repatriation abroad of these funds.
Q. Can FCNR deposits be held jointly with residents?
Ans. No.
Q. Is nomination allowed in FCNR accounts?
Ans. Yes
Q. Is repatriation of FCNR funds to non-resident nominees permitted?
Ans. Yes.
Q. What is the status of FCNR accounts on the return of the account holder to India?
Ans. Banks would treat the deposits held in FCNR accounts as resident deposits but would continue to pay interest at the contracted rate till maturity of the deposit.
