FCNR (Foreign Currency Non-resident) Accounts
Foreign Currency Non Resident (FCNR) Accounts are opened for Non Resident Indians. A Non Resident Indian (NRI) is an Indian citizen or foreign national of Indian origin resident outside India for purposes of employment, carrying on business or vocation in circumstances as would indicate an intention to stay outside India for an indefinite period. A person of Indian origin (PIO) is a citizen of any country other than Pakistan, Bangladesh or Sri Lanka, who
- At any time held an Indian Passport,
- He or any of his parents or grand parents was a citizen of India,
- Is a spouse of an Indian Citizen or a person referred to above.
Salient features of Foreign Currency Non Resident (FCNR) Accounts
Persons of Indian nationality or origin residing abroad.
Accounts can be opened in single name or in joint names with another non resident Indian.
Duly filled in Account Opening form with
- Copy of the Passport
- Visa/residence permit
- Two copies of recent photographs
- Initial money remittance
Types of Account
Term / Fixed Deposit Accounts
1 year to 5 years
Currency of account
Accounts can be opened in US Dollars, Euros, Sterling Pounds, Canadian Dollars, Australian Dollars and Japanese Yen.
As the account is maintained in foreign currency, the exchange risk is born by the bank.
Credits in account
Credits in the accounts can be made by:
- Depositing Foreign Currency Notes/Traveler Cheques
- Depositing cheques/instruments drawn in foreign currency
- Inward remittance in foreign currency or Indian Rupees from abroad
- Transfer from another NRE or FCNR account
If credits are received in a currency other than the currency of the account, the amount is converted into the currency of the account at prevailing exchange rates.
Payments/ Transfers from account
Payments/transfers from the accounts can be made by:
- Any foreign currency or Indian Rupees, as desired by depositor. In case of payment in the currency of the account, the exchange risk is born by the bank.
- In case of payment in a currency other than the currency of the account, the amount in currency of the account is converted into the desired currency at prevailing market rates.
By account holder(s)
Interest rates are different for different currencies and different maturities.
Interest rates also vary from bank to bank.
Interest is applied in these accounts at half yearly intervals
The interest may be paid either in lump sum at the time of maturity or it may be paid half yearly as opted by the depositor.
Nomination can also be made in favour of resident Indians.
Allowed from one branch of the issuing bank to another.
No interest is paid if the account is closed before completion of one year.
Premature payments after completion of one year attract some interest penalty.
Exempted from Income Tax in India.
The facility of auto renewal of deposits is available from banks.
Change of Status from Non-Resident to Resident
- Immediately on return of the account holder to India and on his becoming resident in India, he is required to advise the bank. His FCNR account will be re-designated as resident rupees account or converted to RFC (Resident Foreign Currency) account as per his option.
- The fixed / term deposits shall continue to earn interest at the earlier contracted interest rate till maturely.
The balances in FCNR accounts are free of Wealth-tax.
- The proceeds of FCNR accounts can be repatriated outside India at any time without reference to the Reserve Bank.
- Other facilities like International Credit/Debit cards, On-line / Internet banking etc. are usually offered free by banks.
- Rupee loans can be taken in India against the security of the deposit.
- Foreign currency loans can be availed abroad against the security of FCNR deposits.