Q.1. Can accounts be maintained by NRIs in foreign currencies?
Ans. Yes. Accounts in foreign currencies (FCNR accounts) can be maintained by NRIs with authorised dealers in India.
Q.2. What are the foreign currencies in which such accounts can be maintained?
Ans. FCNR Accounts can be maintained in any freely convertible currencies. .
Q.3. Are FCNR accounts permitted to be maintained in the form of current / savings accounts?
Ans. No. FCNR accounts can be maintained only in the form of 'term deposits' i.e. a deposit kept for fixed periods ranging from ONE YEAR to FIVE YEARS.
Q.4. What is the maximum period of maturity for a FCNR term deposit account?
Ans. The maximum period of maturity is FIVE years.
Q.5. Is premature withdrawal of the FCNR term deposit allowed?
Ans. Yes. However, this is subject to the levy of a penalty.
Q.6. What is the penalty for premature withdrawal of a FCNR deposit?
Ans. Levying penalty for premature closure is at the discretion of the bank.
Q.7. If a FCNR deposit of 12 months maturity is withdrawn prematurely, would any interest be payable ?
Ans. For such premature withdrawals, the bank may levy penalty as per their discretion.
Q.8. What about debits to FCNR accounts for local payments?
Ans. Debits for local payments in rupees are allowed freely.
Q.9. Are funds in FCNR accounts freely repatriable abroad?
Ans. Yes. Authorised dealers maintaining these accounts would allow repatriation abroad of these funds.
Q.10. Can FCNR deposits be held jointly with residents?
Ans. Can be held jointly with a resident relative with operating instruction as 'Former or Survivor' The term 'relative' as defined in Companies Act 1956.
Q.11. Is nomination of FCNR funds to non-resident nominees permitted?
Ans. Yes. A nominee can also be non-resident.
Q.12 Is repatriation of FCNR funds to non-resident nominees permitted?
Q.13 What is the status of FCNR accounts on the return of the account holder to India?
Ans. Banks would treat the deposits held in FCNR as resident deposits but would continue to pay interest at the contracted rate till maturity of the deposit or credit to RFC.