Frequently Asked Questions

Date : Jul 27, 2004

Features of various deposit schemes available to Non-Resident Indians (NRIs) (As on Sept. 15, 2003)

Types of Deposit Schemes
Particulars	(Foreign Currency Non-Resident Account (FCNR A/c)	Non-Resident External Rupee Account (NRE A/c)	(Non-Resident Ordinary Account (NRO A/c)
Who can open an account	NRIs or OCBs (Individuals/entities of Bangadesh/ Pakistan nationality /ownership require approval of RBI)	NRIs or OCBs (Individuals/entities of Bangadesh/ Pakistan nationality /ownership require approval of RBI)	Any person resident outside India (Individuals/entities of Bangadesh/ Pakistan nationality /ownership require 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 denominated	Pound Sterling, US Dollar, Jap. Yen, or Euro.	Indian Rupees	Indian Rupees
Repatriability	Repatriable	Repatriable	Not repatriable except for the following in the account:- Current income and interest Upto US$ 1 million per calendar year for any bonafide purposes out of NRO balances/ sales proceeds of assets
Type of Account	Term Deposits only	Savings, Current, Recurring, Fixed Deposit	Savings, Current, Recurring, Fixed Deposit
Period for fixed deposits	For terms not less than 1 year and more than 3 years	No restriction	No restriction
Rate of Interest	Subject to cap: LIBOR - 250 basis points	Subject to cap: LIBOR/SWAP+ 100 basis points	Banks are free to determine interest rates.
LOANS & OVERDRAFTS
IN INDIA
(i) to the Account holder	Permitted	Permitted	Permitted
(ii) to third parties	Permitted	Permitted	Permitted
b) OUTSIDE INDIA
(i) to the Account holder	Permitted	Permitted	Not Permitted
(ii) to third parties	Permitted	Permitted	Not Permitted
b. FOREIGN CURRENCY LOANS IN INDIA
(i) to the Account holder	Permitted	Not Permitted	Not Permitted
(ii) to third parties	Not Permitted	Not Permitted	Not Permitted
PURPOSE OF LOAN
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	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	Personal requirement and /or business purpose. *
In India (ii) to third party	Fund based and/or non-fund based facilities for personal purposes or for carrying on business activities . *	Fund based and/or non-fund based facilities for personal purposes or for carrying on business activities . *	Personal requirement and / or business purpose*
b) OUTSIDE INDIA
To the Account holder and to 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 utilized for the purpose of relending, or carrying on agriculture or plantation activities or for investment in real estate business.

Features of various foreign currency deposit schemes available to Resident Indians

Particulars	Resident Foreign Currency Account (RFC Account)	Resident Foreign Currency (Domestic ) Account (RFC(D) Account)	Exchange Earner’s Foreign Currency Account(EEFC Account)
Who can open an account	Any person resident in India.	Resident Individuals	Any person resident in India
Sources of Funds	Foreign exchange received as pension/ superannuation /other benefits from employer abroad Reaslisation of assets held abroad Foreign exchange acquired as gift or inheritance from person who was NRI	Foreign exchange acquired : while on a visit abroad from any person on visit to India or honorarium or gift or for services or settlement of any lawful obligation by way of honorarium or gift while on a visit abroad representing unspent foreign exchange acquired during travel abroad as gift from a close relative by way of earning through export of goods/services or as royalty honorarium or by any other lawful means. representing the disinvestment proceeds received by the resident a/c holder on conversion of shares held by him to ADRs/GDRs under the sponsored ADR/GDR scheme approved by the FIPB of Govt. of India.	A 100% Export Oriented Unit or a unit in (a) Export processing zone or (b) Sortware technology park or (c)Electronic hardware technology park may credit upto 100% and any other person resident may credit upto 50% of their foreign exchange earnings. (d) Professional like scientists, professors of Indian Universities, economists, lawyers, doctors, artists, architects, engineers, consultants, Cost/ Chartered Accountants, Directors of Boards of overseas companies etc. who render services in their individual capacities outside India, may credit upto 100% of their earnings.
Joint account of two or more residents	Not permitted	Not permitted	Not permitted
Joint account with NRI	Not permitted	Not permitted	Not permitted
Types of account	Savings Current Fixed Deposit	Current Account	Current Account
Period for fixed deposits	Like any resident accounts banks may fix the period	N.A.	N.A.
Rate of interest	The banks are free to determine interest rates.	No interest is payable	No interest is payable.
End Use	No restrictions, including investments overseas	For permissible current and capital account transactions	For bonafide purposes as per Notification No. FEMA 10/2000-RB dt. 3.5.2000
LOANS & OVERDRAFTS In India	Foreign currency loans permitted	Not permitted	Not permitted

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