Diff Types FCY Accounts

EEFC Accounts - Exchange Earners Foreign Currency (EEFC) Accounts
Eligibility
The following are allowed to open EEFC account:
A 100 percent Export Oriented Unit(100% EOU); or

A Unit in:
Export Processing Zone (EPZ), or
Software Technology Park (STP), or
Electronic Hardware Technology Park (EHTP);
Any other person resident in India.
Types of Accounts
Accounts can be:
Savings Account ;
Current Account;
Recurring Deposit (RD) Account; or
Fixed Deposit (FD) Account.
Opening of Account
An 100% EOU or a Unit in EPZ / STP / EHTP can utilise upto 100% and any other
person resident in India can utilise upto 50% of the specified amounts to open the
account.
Amounts specified to open the Accounts are:
inward remittance through normal banking channel;

payments received in foreign exchange by a 100% EOU or a Unit in EPZ or STP or
EHTP for supply of goods to similar such unit or to a unit in Domestic Tariff Area;
payments received by an exporter from an account maintained with an authorized dealer
for the purpose of counter trade;
advance remittance received by an exporter towards export of goods or services;
payments received for export of goods and services from India
Permissible credits
The following are the credits allowed into the Account:

remaining portion of inward remittance / payment received by the recipient in foreign
exchange left after opening of the account;
interest earned on the funds held in the account;
re-credit of unutilized foreign currency earlier withdrawn from the account; or
amount representing repayment by the account holder’s importer customer, of
loan/advances granted
No other payment received in foreign exchange by the account holder from any other
person resident in India can be credited to an EEFC account.
Permissible debits
The following are the debits allowed into the Account:
payment outside India towards a permitted current and capital account transactions;
payment in foreign exchange towards cost of goods purchased from a 100% EOU or a
Unit in EPZ or STP or EHTP;
payment of applicable customs duty;
trade related loans/advances, not exceeding US $ 3 million to importer customer outside
India.
payment in foreign exchange to person resident in India for supply of goods / services
including payments for air fare and hotel expenditure.
Rate of Interest
The banks will determine the rates of interest after considering the rates prevailing in the
international markets.
The rates of interest offered by various Banks in India differ.
It is beneficial to ascertain the best of the rates offered by various banks before investing
with any particular Bank.
Click Here for Interest Rates offered by various Banks and an analysis of the same.
Loans against balances held in the account
Loans in foreign exchange may be granted to the account holders against security of
funds held in the accounts.
Cheque books
Authorized dealer may issue cheque books of separate series with the superscription
"EEFC Account" to the account holders maintaining such accounts.
For any information regarding the Exchange Earner’s Foreign Currency (EEFC) Account
Scheme, please visit the FAQ section
1. What is EEFC account?
Ans. Exporters of goods / services and other recipients of inward remittances in

convertible foreign currency can open EEFC account to keep their balances in the
account.
2. What are the limits prescribed by Reserve Bank to keep the balances received by way
of inward foreign remittances in EEFC accounts?
Ans. An 100% EOU or a Unit in EPZ / STP / EHTP can utilise upto 70% and any other
person resident in India can utilise upto 50% of the specified amounts by way of inward
remittances to open the account.
3. Which beneficiaries of foreign remittances are not allowed to maintain EEFC

accounts?
Ans. Big exporters who are permitted to open foreign currency accounts abroad by
Reserve Bank are not eligible to open EEFC accounts.
4. Whether EEFC account can be maintained in any form?
Ans. EEFC account can be maintained in any convertible foreign currency and in any
form i.e., current, savings or term deposit accounts. However, saving bank accounts is
permitted only in the names of individuals.
5. Whether EEFC balances can be sold / transferred to accounts of other residents?
Ans. EEFC balances cannot be sold / transferred to accounts of other residents.
6. Whether credit facilities are available against the security of EEFC deposits?
Ans. Credit facilities are available in India as well abroad against the security of EEFC
deposits.
7. What are the credits permissible into EEFC Account?
Ans. The following credits are permitted in to the account:

remaining portion of inward remittance / payment received by the recipient in foreign
exchange left after opening of the account;
interest earned on the funds held in the account;
re-credit of unutilized foreign currency earlier withdrawn from the account; or
amount representing repayment by the account holder’s importer customer, of
loan/advances granted
No other payment received in foreign exchange by the account holder from any other
person resident in India can be credited to an EEFC account.
8. What are the debits permissible from EEFC Account?
Ans. The following debits are permitted from the account:
payment outside India towards a permitted current and capital account transactions;
payment in foreign exchange towards cost of goods purchased from a 100% EOU or a
Unit in EPZ or STP or EHTP;
payment of applicable customs duty;
trade related loans/advances, not exceeding US $ 3 million to importer customer outside
India.
payment in foreign exchange to person resident in India for supply of goods / services
including payments for air fare and hotel expenditure.
NRO - Non Resident (Ordinary ) Rupee Account Scheme
Eligibility
Any person resident outside India may open NRO A/c.
Opening of Account in the name of individuals / entities of Bangladesh / Pakistan

nationality / ownership requires RBI approval.
Savings Bank Accounts can also be maintained in Indian Post Offices and can be
operated in a manner similar to NRO A/c.
Types of Accounts
Accounts can be:
Savings Account ;
Current Account;
Recurring Deposit (RD) Account; or
Fixed Deposit (FD) Account.
Opening of Account
NRO A/c can only be opened and maintained in Indian Rupees (INR).
The account holder should furnish an undertaking at the time of opening of the Account
that the credits and debits relating to investments and disinvestments shall be in
accordance with RBI regulations.
Permitted Credits
Proceeds of remittances to India in any permitted currency;

Permitted currency tendered by the account holder during his temporary visit to India;
Transfer from rupees accounts;
Legitimate dues of the account holder in India;
Permitted Debits
Local disbursements in Indian Rupees;

Remittances outside India of current income in India net of applicable taxes;
Rate of Interest
Interest payable on NRO A/c will be at the same rates as on resident accounts. These rates
vary from time to time as per directions issued by Reserve Bank of India.
It is beneficial to ascertain the best of the rates offered by various banks before investing
with any particular Bank.
Loans / Overdrafts are granted to the account holder against security of fixed deposits for:
Personal purposes or for carrying on business activities.
Loans cannot be used for:
re-lending;
carrying on agricultural / plantation activities; or
investment in real estate business.
Loans / Overdrafts are also granted to third parties resident in India:
Conditions to be fulfilled:
Loan should be utilised for personal purposes or for carrying on business activities.

re-lending;
carrying on agricultural / plantation activities; or
investment in real estate business.
Change of Residential status
The existing accounts of a person resident in India going abroad and gaining non-resident
status are automatically designated as Ordinary Non-Resident Accounts (NRO A/c).
On immigrating to India NRO Accounts can be re-designated as resident rupee accounts.
In case of loans or overdraft facilities availed by a person resident in India, and who
subsequently becomes a person resident outside India, payment of interests and
repayment of loan may be made by inward remittance or out of legitimate resources in
India of the account holder.
Nomination / Cancellation
Funds lying in the NRO Account on the death of an account holder can be credited to the
NRO account of his non-resident nominee.
Joint Accounts
Non-Residents can also open joint accounts with residents in India.
Tax Liability
Interest earned on balances in NRO A/c is subject to Indian Income Tax and is deducted
at source. Interest earned is repatriable fully from 1996 onwards. The principal amount is
entirely non-repatriable.
For any information regarding the Non -Resident Ordinary Rupee Account Scheme
(NRO A/c), please visit the FAQ section.
FAQ –
1. What is an NRO account?
Ans. Resident accounts held in India by non-residents are referred to as NRO

accounts. When a resident becomes non-resident his existing bank accounts in India
are treated as NRO accounts. NRO account can be opened only with inward foreign
remittances.
2. What is the status of NRO accounts?
Ans. NRO accounts are treated on par with resident accounts. They can be
maintained either in the form of current / savings account or fixed deposit.
3. Whether NRO account can be opened jointly with any resident?
Ans. Yes. NRO account can be opened jointly with any resident.
4. Can Pakistani / Bangladeshi individuals / entities are allowed to open

NRO accounts?
Ans. Pakistani / Bangladeshi individuals / entities can open banks accounts in India
only with specific approval of Reserve Bank.
5. What are the restrictions on transactions in NRO account?
Ans. Only the following credits are allowed into these accounts:
i. proceeds of remittances to India in any permitted currency;

ii. permitted currency tendered by the account holder during his temporary visit
to India;
iii. transfer from rupees accounts;
iv. legitimate dues of the account holder in India.
Only the following debits are allowed into these accounts:
i. local disbursements in rupees;

ii. remittances outside India of current income in India net of applicable taxes.
6. Can funds lying in NRO account be remitted outside India?

Ans. The funds lying in NRO account cannot be remitted outside India. However,
interest earned on the balances in NRO account, which represents original foreign
inward remittances, can be remitted outside India.
7. What happens to NRO account when a non-resident returns for staying
permanently in India?
Ans. NRO account will automatically be re-designated as resident account.
8. Whether funds lying in NRO account are subject to any tax?
Ans. Tax at the rate of 30 % is deducted at source from the interest earned on NRO
account.
9. Are loans / overdrafts granted to account holders against security of
fixed deposits in NRO account?
Ans. Loans / Overdrafts are granted to non-resident account holders on the security
of fixed deposit held by them in NRO account. The loans cannot be used for the
purpose of re-lending, carrying on agricultural / plantation activities or for
investments in real estate business.
10. Are loans / overdrafts granted to third parties against security of fixed
deposits in NRO account?
Ans. Loans / Overdrafts are granted to resident individuals / firms / companies in
India against the security of deposits held in NRO accounts, subject to the following
terms and conditions:
i. loan should be utilised for personal purposes or for carrying on

business activities.
ii. loans cannot be used for:
a. re-lending;
b. carrying on agricultural / plantation activities; or
c. investment in real estate business.
i. funds held in NRO accounts of the lender should be his own funds and
not borrowed funds.
11. What happens to loans / overdraft facilities taken by residents on their

becoming non-residents?
Ans. Loans / Overdraft facilities taken by residents on their becoming non-residents
will continue to be granted to them subject to re-payment of interest and principal
amount being made by inward remittance or out of legitimate resources in India of
the account holder.
12. Can an NRO account holder make nomination?
Ans. Nomination facility is available to NRO account holder. Nomination can be made
either in favour of a resident or a non-resident.
13. Whether balance in NRO account can be paid to non-resident nominees
after the death of account holder?
Ans. The balance in the NRO account cannot be remitted outside India and will be
credited to the NRO account of the non-resident nominee
NRE - Non Resident (External) Rupee Account Scheme
Eligibility
The following are permitted to open and maintain these accounts:
1. NRIs (Non-Resident Indians); and

2. OCBs (Overseas Corporate Bodies).
The non-resident should open the Account himself.
1. Power of Attorney holder on behalf of non-resident cannot open the Account.

2. Opening of Account in the name of individuals / entities of Bangladesh /
Pakistan nationality / ownership requires RBI approval.
Types of Accounts
Accounts can be:
1. Savings Account ;
2. Current Account;
3. Recurring Deposit (RD) Account; or
4. Fixed Deposit (FD) Account.
Permitted Credits
1. Proceeds of remittances to India in any permitted currency;
2. Proceeds of personal cheques drawn by the account holder on his foreign
currency account and of travellers cheques, bank drafts payable in any
permitted currency. The traveller's cheques / drafts should be in the name of
the account holder or endorsed in his favour;
3. Proceeds of foreign currency notes / bank notes tendered by account holder
and the same is declared on a Currency Declaration Form (CDF);
4. Transfer from NRE / FCNR Accounts;
5. Interest accruing on the funds held in the account;
6. Interest on Government securities and dividend on units of mutual funds. The
securities / units should be purchased out of funds in NRE / FCNR Account or
out of inward remittance of foreign exchange;
7. Maturity / Sale proceeds of the following:
a. Government securities; or
b. Units of Mutual Funds.
The securities or units should be purchased out of funds in NRE / FCNR

Account or out of inward remittance of foreign exchange;
8. Refund of subscription monies made to new issues of shares or debentures of

Indian Companies. Subscription should have been made out of funds in NRE /
FCNR Account or out of inward remittance of foreign exchange;
9. Refund of application / earnest money made by house-building agencies on
account of non-allotment of flat / plot. Interest payable by the agency can
also be credited if tax has been deducted at source. Application / Earnest
money should have been paid out of funds in NRE / FCNR Account or out of
inward remittance of foreign exchange; and
10. Any other credit if covered under general or special permission granted by
Reserve Bank of India (RBI).
Permitted Debits
1. Local disbursements;
2. Remittances outside India;
3. Transfer to NRE / FCNR Account of the account holder or of any other person
eligible to maintain such account;
4. Investment in shares / securities / commercial paper of an Indian Company or
for purchase of immovable property in India. The RBI should have permitted
the investment / purchase; and
5. Any other debit if covered under general or special permission granted by
Rate of Interest
It is beneficial to ascertain the best of the rates offered by various banks before
investing with any particular Bank.
A. Loans are granted to the account holder for:
1. Personal purposes or for carrying on business activities.
a. re-lending;
2. Making direct investment on non-repatriation basis by

contribution to Capital in Indian Firms / Companies.
3. For acquisition of flat / house in India for the account holder's
residential purpose.
B. Loans are also granted to third parties resident in India:
1. There should be no direct or indirect foreign exchange

consideration for the non-resident depositor;
2. Loan should be utilised for personal purposes or for carrying on
a. re-lending;
C. The account holder for taking loans outside India can also show these
deposits as security.
Banks allow temporary overdrawings on the NRE Savings Bank Accounts. The
overdrawings have to be repaid within two weeks out of:
a. inward remittances; or
b. by transfer of funds from other NRE / FCNR Account.

On immigrating to India:
1. NRE Accounts can be re-designated as resident accounts; or

2. Funds held in NRE Accounts may be transferred to RFC Account.
Nomination can be in favour of residents or non-residents.
Funds lying in the NRE Account on the death of an account holder can be repatriated
to his non-resident nominee.
For remittance of funds by resident nominee outside India for meeting the liabilities
of the deceased account holder or for similar other purposes, RBI approval is
required.
Joint Accounts
Two or more non-resident individuals can open Joint Account, provided they are
Persons of Indian Nationality or Origin. However, Opening of these accounts by a
non-resident jointly with a resident is not permissible.
Operations by Power of Attorney (POA) Holder
POA Holder can make withdrawals from the account only for local payments. The
POA Holder is permitted to operate the Account to make investments on behalf of the
account holder.
However, the POA Holder is not allowed:
a. to repatriate funds held in the account outside India;

b. to make payment by way of gift to a resident on behalf of the account holder;
or
c. to transfer funds from the account to another NRE Account.
Cheque Books
Special series of cheques are issued to the account holders by banks for easy
identification and quicker processing.
Tax Liability
Income from interest on balances standing to the credit of NRE Accounts is exempt
from Income Tax. Balances held in such accounts are exempt from Wealth Tax.
For any information regarding the Non -Resident (External) Rupee Account Scheme
(NRE A/c), please visit the FAQ section
FAQ –
1. What is NRE account?
Ans. NRE account is a convertible foreign currency account designated in rupees.
2. Who can open NRE account?
Ans. The following are permitted to open and maintain these accounts:
i. NRIs (Non-Resident Indians); and

ii. OCBs (Overseas Corporate Bodies).

NRO accounts?
only with specific approval of Reserve Bank.
4. What are the tax benefits of NRE account?
Ans. Any income from interest on monies standing to the credit of NRE accounts is
exempt from income-tax. Balances held in such accounts are exempt from wealth-
tax. Gifts made to close relatives in India from out of balances in such accounts are
also free of Gift tax.
The above tax exemptions are available only to individuals and no exemption is given
to OCBs.
5. Whether non-resident can credit foreign currency in NRE account in
person during his temporary visit to India?
Ans. Foreign currency notes up to USD 5000 can be credited in the NRE account. If
the sum exceeds USD 5000 then the account holder is required to produce Currency
Declaration Form. Further, he can deposit traveler’s cheques up to USD 5000 in his
account without declaring on Currency Declaration Form. Thus, the aggregate of
foreign currency notes and traveler’s cheques should not exceed USD 10000.
6. Can a power of attorney holder of a non-resident allowed to open the NRE
account?
Ans. A power of attorney holder is not allowed to open NRE account on behalf of a
non-resident. The POA holder can only operate the account for local withdrawals. He
is also restrained from depositing foreign currency notes / traveler’s cheques in the
account. He is also restrained from repatriating any funds lying in NRE account.
7. What are the restrictions on repatriation of funds outside India lying in
his NRE account?
Ans. There are no restrictions on repatriation of funds outside India lying in the NRE
accunt. The rupees will be converted into foreign currency at the foreign exchange
rate prevailing on the date of withdrawal.
8. Can NRE account be opened jointly with a resident?
Ans. Non-residents can only open NRE account. Therefore, opening of joint accounts
with residents is not allowed.
9. Can balances lying in NRE account be transferred to FCNR account?
Ans. Both NRE and FCNR accounts are repatriable. Hence, funds lying in the NRE
account can be freely transferred to FCNR account and vice versa.
10. What is the status of NRE account, when an account holder becomes a
resident?
Ans. On the account holder becoming a resident, the funds lying in NRE account are
allowed to be credited to Resident Foreign Currency account (RFC Account).
11. In which form NRE accounts can be opened?
Ans. NRE accounts can be opened in the from of:
1. Savings Account ;
2. Current Account;
3. Recurring Deposit (RD) Account; or
4. Fixed Deposit (FD) Account.
12. Can an NRE account holder make nomination?

Ans. Nomination can be made either in favour of residents or non-residents. On the
death of an account holder, funds lying in the account can be repatriated to non-
resident nominees. If the nominee is a resident, remittance of funds by him outside
India for meeting the liabilities of the deceased account holder or for similar other
purpose should be approved by the Reserve Bank.
13. What are the credits allowed into NRE account?
Ans. The following credits are allowed into the NRE account:

4. Transfer from NRE / FCNR Accounts;
securities / units should be purchased out of funds in NRE / FCNR Account or
The securities or units should be purchased out of funds in NRE / FCNR


Indian Companies. Subscription should have been made out of funds in NRE /
FCNR Account or out of inward remittance of foreign exchange;
money should have been paid out of funds in NRE / FCNR Account or out of
14. What are the debits allowed from NRE account?

Ans. The following debits are allowed from the NRE account:
3. Transfer to NRE / FCNR Account of the account holder or of any other person
15. Can funds be transferred from one NRE account to another NRE account?
Ans. Funds can be freely transferred from one account to another account.
16. Are loans / overdrafts granted to account holders against security of
fixed deposits in NRE account?
Ans. Loans / Overdrafts are granted to non-resident account holders on the security
of fixed deposit held by them in NRE account. However, loans / overdrafts against
NRE deposits in India for the purpose of investments are not allowed. The loans
cannot be used for the purpose of re-lending, carrying on agricultural / plantation
activities or for investments in real estate business.
Repayment will have to be made either by adjustment of the deposit or by fresh
remittances in foreign exchange from abroad. The loan can also be repaid out of local
rupee resources held in the NRO account of the borrower subject to the condition
that the loan repaid from local resources would be charged interest at commercial
rate as in force from time to time.
17. Whether resident individuals / firms / companies in India can avail of
loans against fixed deposits held in NRE accounts of non-residents?
Ans. Loans are also granted to third parties resident in India subject to the following
conditions:
1. There should be no direct or indirect foreign exchange consideration for the

non-resident depositor;
2. Loan should be utilised for personal purposes or for carrying on business
activities.
a. re-lending;
18. Whether resident individuals / firms / companies in India can avail of

loans against fixed deposits held in NRE accounts of non-residents?
Ans. Overseas branches / correspondents of authorised dealers are allowed to grant
fund based and / or non-fund based facilities to or in favour of non-resident depositor
or to third parties. The facilities are granted at the request of the NRE account holder
for bonafide purpose and against the security of funds held in the NRE Accounts in
India. Remittance of funds from India for liquidation of the outstandings of account
holder is allowed subject to report to Reserve Bank.
Foreign Currency (Non- Resident) Account with Bank
Eligibility
The following are permitted to open and maintain these accounts:
1. NRIs (Non-Resident Indians); and

2. OCBs (Overseas Corporate Bodies).
Opening of Account in the name of individuals / entities of Bangladesh / Pakistan

nationality / ownership requires RBI approval.
Types of Accounts
Accounts can be only in the form of Term Deposits (TD). The maturity periods being:
1. One year and above but less than two years;

2. Two years and above but less than three years; or
3. Three years only.
Opening of Account
Accounts can be opened:
1. with funds remitted from outside India;

2. with funds received in rupees by debit to the account of a non-resident bank;
3. by transfer of funds from existing FCNR / NRE Account.
Deposits may be made in designated currencies viz.,
• US Dollar
• Pound Sterling;
• Deutsche Mark;
• Japanese Yen;
• Euro; or
• Any other currency as may be designated by RBI.
Remittances received in Indian Rupees for opening these accounts shall be converted
into the designated foreign currencies at the prevailing T.T. Selling Rate.
Permitted Credits

4. Transfer from FCNR / NRE Accounts;
securities / units should be purchased out of funds in FCNR / NRE Account or
The securities or units should be purchased out of funds in FCNR / NRE


Indian Companies. Subscription should have been made out of funds in FCNR
/ NRE Account or out of inward remittance of foreign exchange;
money should have been paid out of funds in FCNR / NRE Account or out of
Permitted Debits
3. Transfer to FCNR / NRE Account of the account holder or of any other person
For the purpose of payment in rupees, funds held in these accounts shall be
converted into Indian Rupees at the prevailing T.T. Buying Rate.
Movement of funds will be free of inland exchange or commission.
Rate of Interest
A. Loans are granted to the account holder for:
1. Personal purposes or for carrying on business activities.
a. re-lending;
2. Making direct investment on non-repatriation basis by

contribution to Capital in Indian Firms / Companies.
3. For acquisition of flat / house in India for the account holder's
residential purpose.
B. Loans are also granted to third parties resident in India:
1. There should be no direct or indirect foreign exchange

consideration for the non-resident depositor;
2. Loan should be utilised for personal purposes or for carrying on

a. re-lending;
C. The account holder for taking loans outside India can also show these
deposits as security.

On immigrating to India:
1. FCNR (B) Accounts can be re-designated as resident accounts; or

2. Funds held in FCNR (B) Accounts may be transferred on maturity to RFC
Account.
Deposits shall continue till maturity at the contracted rate of interest.
Repatriation of funds to non-resident nominee

Nomination can be in favour of residents or non-residents.
Funds lying in the NRE Account on the death of an account holder can be repatriated
to his non-resident nominee.
For remittance of funds by resident nominee outside India for meeting the liabilities
of the deceased account holder or for similar other purposes, RBI approval is
required.
Joint Accounts
Two or more non-resident individuals can open Joint Account, provided they are
Persons of Indian Nationality or Origin.
However, Opening of these accounts by a non-resident jointly with a resident is not
permissible.
Operations by Power of Attorney (POA) Holder
POA Holder can make withdrawals from the account only for local payments. The
POA Holder is permitted to operate the Account to make investments on behalf of the
account holder.
However, the POA Holder is not allowed:
a. to repatriate funds held in the account outside India;

b. to make payment by way of gift to a resident on behalf of the account holder;
or
c. to transfer funds from the account to another FCNR Account.
Temporary Overdrawings
Banks allow temporary overdrawings on the NRE Savings Bank Accounts. The
overdrawings have to be repaid within two weeks out of:
a. inward remittances; or
b. by transfer of funds from other FCNR / NRE Account.
Tax Liability
Income from interest on FCNR Deposit Account is exempt from Income Tax. Deposit
amount in such accounts is exempt from Wealth Tax.
Premature withdrawal of the Deposit
Premature withdrawal of FCNR Deposits for the purpose of opening of NRNR Rupee
Deposit Account with an authorised dealer other than the one with whom the FCNR
Deposit Account is maintained will attract penalty.
For any information regarding the Foreign Currency (Non -Resident) Account (Bank)
Scheme (FCNR-B A/c), please visit the FAQ section
FAQ’s
1. What is FCNR account?
Ans. FCNR account is an account designated in foreign currencies viz., Pound

Sterling, U.S. Dollar, Deutsche Mark, Japanese Yen, Euro or any other currency
designated by the Reserve Bank.
2. What is the need of having foreign currency accounts in India?
Ans. Since money market in India is volatile and every day exchange fluctuations
take place, the non-residents not sure where the Indian rupee stands against other
foreign currencies. To avoid these exchange rate fluctuations in their normal trade,
the non-residents are allowed to open FCNR accounts.
3. Who can open the FCNR accounts?
Ans. Non-Resident Indians (NRIs) and Overseas Corporate Bodies (OCBs) are
allowed to open and maintain FCNR accounts in India.
4. How to open the FCNR account?
Ans. Accounts can be opened:
1. with funds remitted from outside India;

2. with funds received in rupees by debit to the account of a non-resident bank;
3. by transfer of funds from existing FCNR / NRE Account.
5. Whether the account holders can nominate non-residents?

Ans. Nomination in favour of non-residents and the funds lying on the death of an
account holder can be repatriated to non-resident nominees.
6. What are the tax benefits available to FCNR account holder?
Ans. Income from interest on moneys standing to the credit of FCNR account is
exempt from income tax. Gifts from such accounts are also free of gift tax in the
hands of donee. The balances held in the account are free from Wealth Tax.
7. Whether funds in FCNR are freely repatriable abroad?
Ans. Yes.
8. Whether any restrictions are there to utilise FCNR funds in India?
Ans. There are absolutely no restrictions on withdrawal of funds from FCNR account.
Even investments can be done on repatriable basis from FCNR account.
9. In what type FCNR account can be maintained?
Ans. FCNR account can be maintained only in fixed deposit form. The tenure of fixed
deposits can range from six (6) months to three (3) years.
10. Whether premature withdrawal of the funds from the account is
allowed?
Ans. Premature withdrawal of funds can be made from the account. However, the
interest rate is adjusted based on the term for which the deposit runs.
11. If an FCNR account holder becomes resident, will he be allowed to
continue his FCNR account?
Ans. The account holder is allowed to continue his FCNR deposit till the date of
maturity at the contracted rate of interest, if desired. The deposit will run as resident
deposit and not as FCNR deposit.
12. Whether non-resident on becoming a resident can convert his FCNR
deposit into RFC account?
Ans. The account holder is given the option to convert the RFC account into rupee
deposit account on becoming a resident
RFC A/c – Resident Foreign Currency Account scheme
Eligibility
A person resident in India may open, hold and maintain a Resident Foreign Currency
Account.
Opening of Account
Any eligible person may open an account in any foreign currency by submitting
application in the prescribed form.
The following documents will also be required attached to the application form:
1. Attested copy of passport;

2. Documentary evidence to show that funds proposed to be credited to the
account are eligible for the purpose.
RFC Account can be opened out of foreign exchange:
a. received as pension or any other superannuation or other monetary benefits

from employer outside India; or
b. realized on conversion of the assets owned by him when he was non-resident;
c. received or acquired as gift or inheritance from a person resident outside
India;
d. acquired or received before 8th July1947 or any income arising or acruing
thereon which is held outside India by any person in pursuance of permission
granted by the RBI
Rate of Interest
Loans/overdrafts against the account

No loan or overdraft shall be allowed either directly or indirectly against balances in
an RFC account.
The balance in the account, on the death of an RFC account holder, may be
repatriated to the resident nominee.
Joint Accounts
Non-Residents can also open joint accounts with residents in India.
Tax Liability
Interest earned on balances in RFC account is subject to Indian income tax.
For any information regarding the Resident Foreign Currency (RFC) Account Scheme,
please visit the FAQ section
FAQ
1. What is RFC Account?
Ans. The account can be opened and maintained by non-resident Indians, who come
back to India for permanent settlement. The account can be opened and maintained
by non-resident Indians, who come back to India for permanent settlement.
2. Who are eligible to open RFC account?
Ans. All the persons who have been resident outside India for a continuous period of
not less than one year can open RFC account. To arrive at the period of continuous
stay abroad of not less than one year, short visits to India on personal grounds like
meeting family members / relatives or on health grounds which do not indicate the
person's intention to stay in India for an indefinite period may be ignored.
3. In which currency RFC account is to be maintained?
Ans. RFC account can be maintained in any convertible foreign currency.
4. In what from RFC account can be opened?
Ans. RFC account can be opened in the form of current, savings and fixed deposit.
5. Whether RFC account can be opened jointly with a resident?
Ans. Only eligible returning Indians can jointly open the RFC account.

NRO accounts?
only with specific approval of Reserve Bank. Pakistani / Bangladeshi individuals /
entities can open banks accounts in India only with specific approval of Reserve
Bank.
7. Which are the amounts to be credited in RFC accounts?
Ans. The following credits are allowed into RFC account:
i. funds in bank accounts outside India;

ii. income such as dividend, interest, profit, rent, etc. earned on eligible assets;
iii. sale proceeds of eligible assets;
iv. pension or other monetary benefits received from outside India in convertible
foreign currency arising out of employment taken up outside India prior to his
returning to India;
v. interest earned on RFC account;
vi. foreign currency notes / travellers cheques brought into India through proper
channela;
vii. transfers from other RFC accounts of the account holder;
viii. balances in any NRE / FCNR Account standing to the credit of account holder
at the time of his arrival in India;
ix. unspent foreign exchange surrendered by the RFC account holders.
8. Whether funds lying in the RFC account can be utilised outside India?
Ans. The funds in the RFC account can be freely utilised by the account holder for
any bonafide remittance outside India through normal banking channels. The funds
can be utilised for making investments abroad provided the cost of such investments
and / or any subsequent payments required therefor are met out of RFC account.
9. Whether withdrawals or payments from RFC account are allowed freely in

India?
Ans. Withdrawals / Payments from the accounts are allowed freely in Indian rupees.
The exchange rate will be arrived at the prevailing market rate.
10. Whether nomination facility is available to RFC account holder?
Ans. RFC account holder can make nomination facility as in the case of
resident rupee accounts.
11. Whether non-resident nominee is allowed repatriation of funds lying in
RFC account of deceased?
Ans. On the death of an RFC account holder the balance in the account can be
repatriated to nominee, if on the date of death of the account holder such nominee is
resident outside India. If any nominee is a person resident in India on the date of the
death of the account holder, the amount will be paid to him / her in equivalent Indian
rupees.
If the resident nominee desires to remit funds out of his share of the repatriable
deposits of the deceased account holder for meeting the latter's liabilities abroad or
for similar other purposes, approval of Reserve Bank should be obtained.
12. Whether loans / overdrafts against security of RFC deposits is allowed?
Ans. Loans / Overdrafts against security of RFC deposits is not allowed.
13. If an RFC account holder again becomes a non-resident, will he be
allowed to repatriate the funds to NRE / FCNR account?
Ans. Funds held in RFC account are freely remittable abroad or credited to fresh NRE
/ FCNR accounts in the event of the account holder becoming non-resident
QA22 Accounts:
Eligibility
1. Branches/Offices in India of foreign firms/companies/associations.

2. Foreign nationals resident but not permanently resident in India.
Types of Account
1. Individuals may open:
a. Current Account
b. Saving Account
c. Fixed Deposit
2. Foreign firms/companies may maintain current accounts only.

Term deposits with a maturity not exceeding three months may be opened out of
surplus amounts held in the account..
Opening of Account
1. An undertaking in form QA 22 duly signed by all the persons who are authorised
to operate on the accounts has to be submitted to the authorised dealer.
2. Fresh declarations should be made in the event of any addition to the list of
persons authorised to operate on the accounts.
3. Form QA 22 need not be completed when accounts are to be opened in the names
of:
a. Foreign Embassies
b. Consulates
c. Legations
d. Trade Representations
e. Foreign Government estabilishments in India
United Nations Organisation and its subsidiary/affiliate bodies in India or their
f.
officials in India
g. Foreign nationals of non-Indian origin permanently resident in India
h. Foreign nationals of Indian origin (other than those who are residing in India
for employment of specified duration irrespective of the length thereof or for a
specific job or assignement, the duration of which does not exceed three years)
and
Foreign-born wives of Indian nationals and of persons of Indian origin resident
i.
in India.
Permitted Debits and Credits
1. It is illegal for account holders to provide any foreign exchange to other residents
through their non-resident associates against reimbursement provided locally.
RBI permission has to be obtained when doing such activities.
2. QA 22 accounts are treated as resident accounts and operations thereon are

allowed freely, provided credits to the accounts arise out of sources declared on
the form.
3. Credits of refund are allowed when security deposit is paid for:
a. Securing Accommodation
b. Reimbursement of vehicle insurance claims
c. Loan repayment by the employees to the QA 22 account of the Indian
branches/offices of foreign companies; when the original payment was made
by debit to concerned QA 22 account.
1. Applications in form LOV 2 have to made for obtaining loans against balances
held in the account.
2. Loans/overdrafts shall not be granted to liasion offices of foreign companies since

entire expenses of such offices are required to be met out of funds remitted from
abroad.
Change of residential status
1. When the account holder becomes a non-resident, the account may be converted
in the Ordinary Non-resident Rupee account (NRO).
Joint Accounts
1. Accounts can be open jointly.
FAQ
1. What is QA 22 account?
Ans. The QA 22 accounts are resident accounts opened by foreign companies and
foreign nationals in India.
QA 22 accounts in the name of individuals can be maintained in any form such as

current / savings accounts and fixed deposits. Accounts of foreign firms / companies
can be maintained only in the form of current accounts.
2. What is QA 22 undertaking?
Ans. QA undertaking is obtained from all foreign nationals / firms, companies or

other organisations whose registered or head offices are situated outside India and
who intend to open a QA 22 account. However, the following are exempted from
submitting the undertaking:
i. Diplomats attached to Foreign Embassies, Legations, Consulates and Trade

Representations and other Foreign Government Officials, in India; and
ii. Officials of the United Nations Organisations and its subsidiary/affiliate bodies.
3. What is the object behind QA 22 accounts?

Ans. The object behind permitting opening of QA22 accounts is to bring to the notice
of account holders that is illegal for them to provide any foreign exchange to other
residents through non-resident associates against reimbursement provided locally.
4. What is the status of QA 22 accounts?
Ans. QA 22 accounts are treated as resident accounts and operations thereon
allowed freely provided credits to the account arise out of sources declared properly.
5. What happens to QA 22 account when a resident becomes a non-
resident?
Ans. When an account holder ceases to be a resident, the account may be converted
into an NRO account.
6. What are the credits allowed into QA 22 accounts?
Ans. Credits can be either by way of foreign inward remittances or the credit arising
out of income due to employment / profession / occupation / business in India as
permitted.
RIB - bonds Scheme
The Resurgent India Bond (RIB) scheme was launched by State Bank of India on 5th
August 1998 for NRIs, OCBs and Banks acting in fiduciary capacity on behalf of
NRIs/OCBs. The scheme was closed on 4th September 1998. The funds raised from
the RIB scheme is being utilised mainly for the development of the infrastructure
sector, which is priority sector of India.
The RIB scheme was denominated in three currencies.

USD - US dollar
GBP - Pound sterling
DEM - Deutsche Mark
Interest Rates
US Dollar – 7.75% p.a.

Pound Sterling – 8.00% p.a.
Deutsche mark – 6.25% p.a.
Payment of Interest
-The interest payable on RIBs is on half yearly basis.

-It is paid either on a cumulative or a non-cumulative basis at the option of
investors.
-The gross interest would be payable without any withholding tax.
Mode of Payment
Cumulative RIBs compounded half yearly and payable in the currency in

which the RIB is denominated i.e. US/GBP/DEM.
Non cumulative RIBs compunded half yearly and payable in non-repatriable

Indian rupees.
Maturity of RIBs
-The maturity of RIBs is when the term of investment ends and proceeds are paid
out.
-Tenure for RIBs - 5 years from the date of issue.
If holder is an NRI/OCB/Bank acting in a fiduciary capacity on behalf of any

NRI/OCB
-The amount (principle + interest) will be payable in USD/GBP/DEM as per the case.
-It is paid on expiry of 5 years term from the date of allotment.
-The first payment can be made only after six months from the date of allotment.
If holder becomes a resident in India before Maturity of RIBs
-The principle amount of RIBs would be payable on maturity.

-The interest earned thereon would be payable in USD/GBP/DEM as the case may be.
-It is credited to a Resident Foreign currency account or paid in non-repartriable
Indian rupees.
If holder is a 'survivor' or 'donee' and a resident of India
-The principle amount of RIBs would be payable on maturity.

-The interest earned on RIBs (the last half yearly interest in case of non-cumulative
RIBs) will be paid in non-repatriable Indian rupees at the State Bank of India (SBI's)
as per prevailing TT buying rate for USD/GBP/DEM on the date of maturity of RIBs.
Procedure
-The RIBs will be repaid in India on the due date (the next working day if the due
date is a holiday) by issuance of Repayment Warrants.
-The warrants will be payable outside India if the payment is made in USD/GBP/DEM.
The Repayment Application Form should be submitted atleast 60 days prior to the
due date of maturity to:
State Bank of India,

NRI Branch, First floor,
Tulsiani Chambers
212, Nariman Point
Mumbai 400021.
-The Repayment Application Form consists of the instructions regarding disposal of

the proceeds and mandatory declaration from the holders.
Premature Withdrawal
i) The premature encashment is permitted only after six months from the date of
allotment.
ii)The proceeds of prematurely encashed RIBs would only be paid on a non-

repatriation basis by conversion of USD/GBP/DEM denominated RIBs to Indian
rupees and without any penalty.
Joint Holdings
Procedure
-It can be held jointly by NRIs on a 'Former or Survivor' basis.

-It can be held jointly by non-residents/residents on a ‘Former or Survivor' basis.
-Interest is payable only to the first holder.
-Interest is paid to the survivor in case of demise of first holder.
Addition of Joint Holders
The addition of joint holders is permitted with payment instructions to the 'Former or
Survivor'.
Click here to view the Application format of request for adding joint
holder
Gifts/Transfers of RIBs
-The RIBs can be gifted only once to a resident Indian.
-It can be gifted to any Charitable Trust in India recognized under the Income Tax
Act 1961 by
1. NRIs (except minors)
2. OCBs
3. Banks acting in a fiduciary capacity on behalf of NRIs/OCBs.
-The RIBs are freely transferable between NRIs and OCBs.
-RIBs are transferable by endorsement and delivery.
-The request for transfer or gift should be submitted to SBI, NRI Branch, Mumbai
atleast 90 days before the date of maturity.
Click here to view the Application format of request for recording Gift /
Transfer
Tax Treatment of RIBs
-The income from RIBs is exempted from income tax.
-It is also free from wealth tax and gift tax.
-In case of premature encashment of the RIBs in non-repatriable Indian rupees the
holder / donee / survivor will be free from any tax in India.
-The benefit of income tax is available to transferee and donee also.
-In USA/UK/Germany the interest earned on RIBs and sale or gift of the RIBs are as
per the taxation laws of the respective countries.
Loans and Advances against RIBs
-The loans and advances are permitted to the holders and third parties against
collateral of the bonds in non-repatriable Indian rupees from authorized dealers in
India.
-The banks in India advance upto 90% of invested amount as a loan at their
discretion either in Indian rupees or in foreign currency with the prior approval of
RBI.
-The interest rate charged on these loans is at the discretion of the bank from which
loan is acquired.
-The application for loans and advances should be made by

1. NRIs
2. OCBs
3. Banks acting in fiduciary capacity on behalf of NRIs/OCBs.
Namasthenri provides solutions for Grievances faced in relation to

Resurgent India Bond (RIB) Scheme like;
- Intimation of Change of Address not being acknowledged.
- Non-receipt of Half Yearly Interest cheques.
- Request for Transfer / Gift not attended.
- Non receipt of RIB Certificates.
- Application form rejected and amount not refunded.
- Addition of Joint Holder not recorded.
- Interest warrant not received for pre-allotment period.
We provide further assistance, in case you would like to transfer RIBs to some other
individual

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EEFC Accounts - Exchange Earners Foreign Currency (EEFC) Accounts

A 100 percent Export Oriented Unit(100% EOU); or

Accounts can be:

Amounts specified to open the Accounts are:

inward remittance through normal banking channel;

The following are the credits allowed into the Account:

The following are the debits allowed into the Account:

The rates of interest offered by various Banks in India differ.

Loans against balances held in the account

1. What is EEFC account?

Ans. Exporters of goods / services and other recipients of inward remittances in

3. Which beneficiaries of foreign remittances are not allowed to maintain EEFC

4. Whether EEFC account can be maintained in any form?

5. Whether EEFC balances can be sold / transferred to accounts of other residents?

Ans. EEFC balances cannot be sold / transferred to accounts of other residents.

7. What are the credits permissible into EEFC Account?

Ans. The following credits are permitted in to the account:

8. What are the debits permissible from EEFC Account?

Ans. The following debits are permitted from the account:

NRO - Non Resident (Ordinary ) Rupee Account Scheme

Any person resident outside India may open NRO A/c.

Opening of Account in the name of individuals / entities of Bangladesh / Pakistan

Accounts can be:

The following are the credits allowed into the Account:

Proceeds of remittances to India in any permitted currency;

Local disbursements in Indian Rupees;

The rates of interest offered by various Banks in India differ.

Loans against balances held in the account

Loans cannot be used for:

On immigrating to India NRO Accounts can be re-designated as resident rupee accounts.

Non-Residents can also open joint accounts with residents in India.

1. What is an NRO account?

Ans. Resident accounts held in India by non-residents are referred to as NRO

2. What is the status of NRO accounts?

4. Can Pakistani / Bangladeshi individuals / entities are allowed to open

5. What are the restrictions on transactions in NRO account?

i. proceeds of remittances to India in any permitted currency;

Only the following debits are allowed into these accounts:

i. local disbursements in rupees;

6. Can funds lying in NRO account be remitted outside India?

i. loan should be utilised for personal purposes or for carrying on

11. What happens to loans / overdraft facilities taken by residents on their

NRE - Non Resident (External) Rupee Account Scheme

The following are permitted to open and maintain these accounts:

1. NRIs (Non-Resident Indians); and

The non-resident should open the Account himself.

1. Power of Attorney holder on behalf of non-resident cannot open the Account.

The securities or units should be purchased out of funds in NRE / FCNR

8. Refund of subscription monies made to new issues of shares or debentures of

1. Personal purposes or for carrying on business activities.

Loans cannot be used for:

2. Making direct investment on non-repatriation basis by

B. Loans are also granted to third parties resident in India:

1. There should be no direct or indirect foreign exchange

Loans cannot be used for:

Change of Residential status

1. NRE Accounts can be re-designated as resident accounts; or

a. to repatriate funds held in the account outside India;

1. What is NRE account?

Ans. NRE account is a convertible foreign currency account designated in rupees.

2. Who can open NRE account?

i. NRIs (Non-Resident Indians); and

3. Can Pakistani / Bangladeshi individuals / entities are allowed to open