A. F.C.N.R. (B) Deposit Scheme
What is FCNR (B) A/c ?
It means ‘Foreign Currency NonResident (Bank)’ Account.
Who can open a FCNR (B) a/c ?
The account can be opened in the name of NRI individuals (single/ joint) or with resident Indians on 'former or survivor' basis.
Who is a Nonresident Indian (NRI)/ Persons of Indian origin (PIO) ?
NRI are those Indian residents who are in employment, studying and staying permanently abroad. PIO are foreign nationals (except of Pakistan and Bangladesh), with their origin in India. Students proceeding abroad for higher studies are treated as Nonresidents.
Which type of accounts can be opened under FCNR (B) ?
Only Term Deposit with maturity of minimum 1 year & maximum 5 years.
In which currencies can these a/cs be opened in our Bank ?
Pound Sterling, US Dollar, Euro, Canadian Dollar and Australian Dollar.
These accounts can be opened with which funds ?
These accounts can be opened as per depositor’s choice, in any of the permitted currencies, out of the funds received as foreign inward remittances in convertible currency through normal banking channel. The Foreign Currency Travellers Cheques / Notes may be accepted during temporary visits of the NRI, for credit to account.
Can these accounts be opened jointly with Indian residents ?
Yes, but with their resident close relative (Relative as defined in Section 6 of the Companies Act, 1956) on 'former or survivor' basis.
Whether nomination is permitted in FCNR (B) Account ?
Nomination in favour of NRI/PIO or a resident is allowed in the account.
What are the maturity periods under the scheme ?
- 1 year and above but < 2 years;
- 2 years and above < 3 years ;
- 3 years and above but <4 years:
- 4 years and above < 5 years ;
- Five years only.
Whether interest income from FCNR (B) account is taxable under Income Tax ?
No. Interest income from FCNR (B) accounts is exempt from Income Tax.
Whether deposit held under FCNR (B) a/cs is taxable under Wealth Tax ?
No. Deposit held under FCNR (B) a/cs is not taxable under Wealth Tax.
Whether resident Indian holder of Power of Attorney is permitted to operate the account ?
Yes. He can give instructions about operations in the account, but can remit the amount abroad only to the account holder.
Is the addition or deletion of name/s of joint account holders allowed ?
At the request of all the joint holders, Bank may allow the addition or deletion of name/s of joint account holder/s as per rules.
Is the amount held under FCNR deposit repatriable ?
Yes. Funds (Principal & Interest) is fully repatriable in foreign currencies.
Is the proceeds of the account also repatriable to third parties ?
Yes. As per the instruction, subject to Bank being satisfied about such repatriations.
Is transfer of funds from existing FCNR (B)/NRE a/c to FCNR (B) and viceversa permitted without the prior approval of RBI ?
What is the manner of payment of interest on FCNR (B) account ?
For deposits up to one year, without any compounding effect,
For deposits for over 1 year, compounding at intervals of 180 days each and thereafter for the remaining actual number of days.
How the interest is to be paid on term deposit maturing on Sundays / holidays / Nonbusiness working days ?
Bank to pay interest at the originally contracted rate on the deposit amount for abovementioned days, intervening between the due date and the actual date of payment, on the succeeding working day.
Is there any facility for granting Loan / overdrafts against FCNR (B) Deposits to account holder/ third party ?
Yes, for permitted purposes, as per RBI guidelines.
What are the restrictions on advances against FCNR (B) deposits ?
Banks are at present prohibited from granting fresh loans or renewing existing loans to individuals in India in excess of Rupees One crores (Rs.100 Lacs) against FCNR (B) deposits.
How interest is payable on FCNR deposits to NRIs on return to India ?
Banks may allow FCNR (B) deposits NRIs/PIOs, who return to India for permanent settlement, to continue till maturity at the contracted rate of interest, if desired, as per rules.
Is the premature withdrawal of deposits allowed ?
Yes. At the request of the depositor, Bank allows premature withdrawal.