FCNR (B) Deposit Scheme

1. Who can open FCNR (B) accounts?

Deposits can now be held jointly with your resident close relatives, on a former or survivor basis.

2. What are the salient features of this deposit scheme?

  • Under this scheme the deposits can be accepted and maintained by an AD Bank in 6 permitted currencies – viz., US Dollar, EURO, Pound Sterling (GBP), Japanese Yen (JPY), Australian Dollar (AUD) and Canadian Dollar (CAD). We are accepting deposits in all the six currencies.

  • The deposits can be accepted for a minimum period of 1 year and maximum period of 5 years.

3. What is the source of funds with which deposits can be opened?

The deposits can be opened by

  • Receiving inward remittances in foreign currency through normal banking channel.

  • Accepting the Cheque drawn in foreign currency on the personal bank account of the NRI customer maintained abroad.

  • Foreign currency Draft / TCs / Foreign Currency notes from the NRI customer during his personal visit to the bank.

  • Transfer of (conversion) rupee funds from NRE SB / NRE term deposit accounts.

  • Transfer of FCNR/NRE rupee funds from other banks.

4. What are the benefits available under this scheme?

  • As the deposit is maintained in foreign currency itself, there is no exchange loss to the NRI customer.

  • The interest amount and principal amount are repatriable in foreign currency at any time.

5. How is the rate of interest determined under this scheme?

  • The interest rate payable on these deposits is linked to the LIBOR / SWAP rates for the respective currencies / maturities and within the ceiling rates advised by RBI from time to time.

  • Under the extant guidelines of RBI, the interest rates shall be paid within the ceiling rate of LIBOR / SWAP rates plus 200 basis points for deposits of one year to less than three years and LIBOR/SWAP rates plus 300 basis points for deposits of 3 to 5 years, for the respective currencies / maturities as advised by Foreign Exchange Dealers’ association of India (FEDAI) as on the last working day of every month.

    Click here for interest rates applicable as on date.

6. What is the manner of payment of interest on FCNR (B) deposits?

  • For deposits up to one year, interest shall be paid without compounding effect.

  • For deposits for over 1 year, the interest shall be paid on half yearly compounding basis.

7. Whether premature withdrawal of FCNR deposits is permitted?

At the request of the depositor, bank allows premature withdrawal. However

  • In case the deposit is closed before completion of the minimum period of 1 year from the date of opening, no interest will be paid.

  • In case the deposit is closed after completion of minimum period of 1 year, there will be a penalty of 1% (The applicable rate of interest for the period for which deposit remained with the bank minus 1% shall be paid).

8. Is payment of interest on overdue FCNR (B) deposit allowed?

  • In case of an overdue deposit no interest is payable if the same is not renewed.

  • In case the request for renewal of an overdue deposit or part thereof is received within 14 days from the due date, deposit can be renewed from the due date with the applicable rate of interest prevailing on that day.

  • In case the request for renewal is received after 14 days, renewal from back date is not permitted. However simple rate of interest can be paid for the intervening period i.e. for the period from the date of maturity to date of receipt of instructions for renewal of deposit by applying the lower rate of interest prevailing on the above two dates. The interest so calculated for the broken period shall be added to the maturity amount and a new deposit will be opened from the prospective date.

9. Whether bank accepts Auto renewal of deposits and also keeps deposit receipts in safe custody of the bank?

  • The provision for Auto Renewal is available in the application form itself. NRIs can choose this option and also request separately for Safe Custody of the deposit receipts.

  • On such automatic renewal, the rate of interest for the renewed period shall be the rate prevailing on the maturity date of the deposit.

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