Features of various deposit schemes available to Non-Resident Indians (NRIs) - FEMA - FAQ - FEMA

Particulars Foreign Currency (Non-Resident) Account (Banks) Scheme (FCNR(B) Account) Non-Resident (External)Rupee Account Scheme (NRE Account) Non-Resident Ordinary Rupee Account Scheme (NRO Account) (1) (2) (3) (4) Who can open an account NRIs (individuals / entities of Bangladesh/ Pakistan nationality/ownership require prior approval of RBI) NRIs (individuals / entities of Bangladesh / Pakistan nationality / ownership require prior approval of RBI) Any person resident outside India (other than a person resident in Nepal and Bhutan) (individuals / entities of Bangladesh / Pakistan nationality / ownership as well as erstwhile OCBs require prior approval of RBI) Joint account In the names of two or more non-resident individuals In the names of two or more non-resident individuals May be held jointly with residents Nomination Permitted Permitted Permitted Currency in which account is denominated Pound Sterling, US Dollar, Jap. Yen, Euro, Canadian Dollar and Australian Dollar Indian Rupees Indian Rupees Repatriable Repatriable Repatriable Not repatriable except for the following in the account - 1) Current income 2) Upto USD 1 Million per financial year (April- March), for any bonafide purpose out of the balances in NRO account / sale proceeds of assets in India acquired by way of inheritance / legacy inclusive of assets acquired out of settlement subject to certain conditions. Type of Account Term Deposit only Savings, Current, Recurring, Fixed Deposit Savings, Current, Recurring, Fixed Deposit Period for fixed deposits For terms not less than 1 year and not more than 5 years. At the discretion of the bank As applicable to resident accounts. Rate of Interest Subject to cap : LIBOR / SWAP rates for the respective currency / corresponding maturities minus 25 basis points Subject to cap : Fixed Deposits : LIBOR / SWAP rates, as on the last working day of the previous month, for US dollar of corresponding maturities plus 50 basis points with effect from close of business on January 31, 2007. Savings Bank Account Interest rate shall be at the rate applicable to domestic savings account with effect from close of business in India on 17-11-2005. Banks are free to determine interest rates for term deposits. Operations by Power of Attorney in favour of a resident by the non-resident account holder Operations on the account in terms of Power of Attorney is restricted to withdrawals for permissible local payments or remittance to the account holder himself through normal banking channels. Operations on the account in terms of Power of Attorney is restricted to withdrawals for permissible local payments or remittance to the account holder himself through normal banking channels. - Loans a. In India i) to the Account holder ii) to Third Parties Permitted up to Rs.20 lakhs Permitted upto Rs.20 lakhs Permitted upto Rs.20 lakhs Permitted upto Rs.20 lakhs Permitted Permitted b. Abroad i) to the Account holder ii) to Third Parties Permitted upto Rs.20 lakhs Permitted upto Rs.20 lakhs Permitted upto Rs.20 lakhs Permitted upto Rs.20 lakhs Not Permitted Not Permitted c. Foreign Currency Loans in India i) to the Account holder ii) to Third Parties Not Permitted Not Permitted Not Permitted Not Permitted Not Permitted Not Permitted Purpose of Loan a. In India i) to the Account holder i) Personal purposes or for carrying on business activities. * ii) Direct investment in India on non-repatriation basis by way of contribution to the capital of Indian firms / companies iii) Acquisition of flat / house in India for his own residential use. (Please refer to para 9 of Sch. 2 to FEMA 5) i) Personal purposes or for carrying on business activities. * ii) Direct investment in India on non-repatriation basis by way of contribution to the capital of Indian firms / companies iii) Acquisition of flat / house in India for his own residential use. (Please refer to para 6(a) of Sch.1 to FEMA 5) Personal requirement and / or business purpose * ii) to Third Party Fund based and / or non-fund based facilities for personal purposes or for carrying on business activities *. (Please refer to para 9 of Sch. 2 to FEMA 5). Fund based and / or non-fund based facilities for personal purposes or for carrying on business activities *. (Please refer to para 6(b) of Sch. 1 to FEMA 5) Personal requirement and / or business purpose * b. Abroad To the account holder and Third Party Fund based and / or non-fund based facilities for bonafide purposes. Fund based and / or non-fund based facilities for bonafide purposes. Not permitted. * The loans cannot be utilised for the purpose of re-lending or for carrying on agriculture or plantation activities or for investment in real estate business. Note : a. When a person resident in India leaves India for Nepal and Bhutan for taking up employment or for carrying on business or vocation or for any other purpose indicating his intention to stay in Nepal and Bhutan for an uncertain period, his existing account will continue as a resident account. Such account should not be designated as Non-resident (Ordinary) Rupee Account (NRO). b. ADs may open and maintain NRE / FCNR (B) Accounts of persons resident in Nepal and Bhutan who are citizens of India or of Indian origin, provided the funds for opening these accounts are remitted in free foreign exchange, Interest earned in NRE / FCNR (B) accounts can be remitted only in Indian rupees to NRIs and PIO resident in Nepal and Bhutan. c. In terms of Regulation 4(4) of the Notification No.FEMA.5/2000-RB dated May 3, 2000, ADs may open and maintain Rupee accounts for a person resident in Nepal / Bhutan. d. The regulations relating to the various deposit schemes available to Non-Resident Indians have been notified vide Notification No.FEMA.5 dated 3 rd May 2000, as amended from time to time. The relevant Notifications and A P (DIR Series) Circulars have been placed on our website www.rbi.org.in and may please be referred to for full details.