FAQ for NRIs - Bank Accounts

Rupee Questions

At what rates are remittances to India by NRIs for credit to NRE/NRO/NRNR accounts converted into rupees?

Remittances made for credit to rupee accounts (i.e. NRE/NRO/NRNR accounts) maintained by NRIs are converted at market rate.

Is there any scheme under which non-residents other than NRIs can also keep rupee deposits with banks in India?

Yes, NRI and other non-residents can maintain NRO rupee accounts as well as keep deposits with banks in India under NRNR Rupee Deposit Scheme

How should an account under the non-resident Non- repatriable (NRNR) Rupee Deposit Scheme be opened?

Such an account can be opened with an authorised dealer in India by remitting funds from abroad in any convertible foreign currency. Under the NRNR Scheme, deposits designated in rupees can be kept for periods ranging from 6 months to 3 years. NRIs can also open such accounts by transferring funds from their existing NRE/FCNR accounts. No penal interest is chargeable for premature withdrawal of NRE/FCNR deposits for the purpose of making investments in the scheme. if the deposit is to be kept with the same authorised dealer.

What is the rate of interest payable on NRNR deposits?

Banks are free to determine the interest rate under this Scheme.

Can the principal or the interest accrued on NRNR deposits be repatriated outside India at any time?

The principal amount of the deposit is not eligible for repatriation. Interest earned upto 30th September 1994 is also not eligible for repatriation. Interest earned for the period beginning 1st October 1994 is,however,eligible for repatriation.or can be utilised for opening fresh NRE/FCNR deposits, or can be credited to existing NRE accounts.

Can the principal together with the interest accrued on NRNR deposits be renewed, on maturity?

Only the principal amount of deposit could be renewed under the scheme upto 30th September 1994....  However, since interest accrued for the period from 1st October 1994 is repatriable, the principal amount together with interest accrued for the period from 1st October 1994 can be renewed under the scheme.

Can loans/overdrafts be availed of against the security of these deposits?

Yes Authorised dealers are permitted to grant loans/overdrafts for purposes other than investment.
What is the status of NRO/NRE accounts on the return of the accounts holder to India?

Banks have been advised to redesignate such accounts as resident accounts on return of the account holder to India.
Does the account holder suffer any loss of interest on such redesignation of accounts?

No. Banks have been advised to continue to pay interest at the contracted rate till the maturity of the deposit if the deposit is held for the full term even after conversion into resident rupee account.
Foreign Currency Accounts
Can accounts be maintained by NRIs in foreign currencies?

Yes. Accounts in foreign currencies (FCNR accounts) can be maintained by NRIs with authorised dealers in India.
What are the foreign currencies in which such accounts can be maintained?

FCNR Accounts permitted to be maintained in Pound Sterling, U.S. Dollar, Deutshe Mark and Japanese Yen.
Are FCNR accounts permitted to be maintained in the form of current/savings accounts?

NO. 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.
What is the maximum period of maturity for a FCNR term deposit account?

The maximum period of maturity is three years.
Is premature withdrawal of the FCNR term deposit allowed?

Yes. However, this is subject to the levy of a penalty.
What is the penalty for premature withdrawal of a FCNR deposit?

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.
If a FCNR deposit of 6 months maturity is withdrawn prematurely , would any interest be payable?

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.
Are the interest rates on FCNR deposits liable for periodical revision?

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.
What about debits to FCNR accounts for local payments?

Debits for local payments in rupees are allowed freely. As regards debits for investments in India, please see Chapters III and IV.
Are funds in FCNR accounts freely repatriable abroad?

Yes. Authorised dealers maintaining these accounts would allow repatriation abroad of these funds.
Can FCNR deposits be held jointly with residents?

Is nomination allowed in FCNR accounts?

Is repatriation of FCNR funds to non-resident nominees permitted?

Yes. (Also see Answer to Question for repatriation of funds in NRE account above)
What is the status of FCNR accounts on the return of the account holder to India?

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.

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