SCHEDULE 4 - Regulation 5(1)(iv) - Non-Resident (Non-Repatriable) Rupee Deposit Scheme - Foreign Exchange Management (Deposit) Regulations, 2000

SCHEDULE 4 [See Regulation 5(1)(iv)] Non-Resident (Non-Repatriable) Rupee Deposit Scheme 1. Eligibility : 1 Any person resident outside India (except individuals/entities of Pakistan/Bangladesh nationality/ownership) may open NRNR account with an authorised dealer, provided that no such account shall be opened on and from 1st April 2002, whether by renewal of existing deposit or otherwise. Accounts should be opened in Indian rupees out of the funds remitted from outside India through normal banking channels (in freely convertible currency). In the case of NRIs/OCBs, such accounts may also be opened by transfer of funds from their existing NRE/FCNR deposit accounts. Premature withdrawal of NRE/FCNR deposits for opening NRNR deposits with an authorised dealer other than the one with whom the NRE/FCNR account is maintained will attract penalty, if any, as per the directions issued by Reserve Bank from time to time. 2. Period of deposit : The deposits may be held for periods ranging from 6 months to 3 years. 3. Rate of interest : Banks are free to determine the rate of interest on deposits under this scheme and on advances against funds held in such deposits. 4. Repatriability : Only Interest accrued on the deposits is repatriable. 5. Renewal/Transfer : The principal amount of deposit together with interest accrued thereon may be renewed for a further period ranging from 6 months to 3 years . If the interest accrued on an existing deposit is invested under the Scheme, the amount of interest so invested, will not be eligible for repatriation. The account can also be shifted from one authorised dealer to another. 6. Gift : In the case of individual deposit holder, the amount of deposit can be gifted to any resident/ non-resident or to any Charitable Trust in India recognised under the Income Tax Act, 1961. 7. Joint Accounts with residents : Account may be held jointly with residents. 8. Loans/overdrafts : Loans/overdrafts in India, against the security of these deposits may be granted by the authorised dealer to account holders/third parties for personal purposes or for carrying on business activities and not for carrying on agricultural/plantation activities or real estate business, or for relending, subject to their normal commercial judgement. Repayment of loans/liquidation of overdraft to the account holder shall be by way of inward remittance from outside India through normal banking channels or by debit to NRE/FCNR/NRO/NRNR/NRSR account of the depositor or by adjustment against maturity proceeds of deposit. Repayment of loans availed by third parties may be made out of their own resources. 9. Nomination : An authorised dealer may register nomination in favour of either a resident or non-resident. However, nomination in favour of a non-resident may be registered subject to the condition that the amount standing to the credit of the depositor, in the event of his death, will be paid to the non-resident nominee only in Indian rupees by credit to the nominee s NRO/NRNR/NRSR account and will not be allowed to be remitted outside India. 10. Reporting : Transactions in these accounts shall be reported to Reserve Bank in accordance with the directions issued by it from time to time. **************************** Note : 1. Has been substituted vide Notification No. 052/2002 dated 1/3/200 2