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Overseas Direct Investments

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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1. What is Cheque Truncation? +

Truncation is the process of stopping the flow of the physical cheque issued by a drawer at some point by the presenting bank en-route to the paying bank branch. In its place an electronic image of the cheque is transmitted to the paying branch through the clearing house, along with relevant information like data on the MICR band, date of presentation, presenting bank, etc. Cheque truncation thus obviates the need to move the physical instruments across bank branches, other than in exceptional circumstances for clearing purposes. This effectively eliminates the associated cost of movement of the physical cheques, reduces the time required for their collection and brings elegance to the entire activity of cheque processing.

1. What is Indo-Nepal Remittance Facility Scheme under NEFT ecosystem? +

Ans: The Indo-Nepal Remittance Facility (INRF, Scheme) is a cross-border remittance scheme to transfer funds from India to Nepal (one-way only), enabled under the NEFT ecosystem. The scheme was launched by the Reserve Bank of India (RBI) in May 2008 to provide a safe and cost-efficient avenue to migrant Nepalese workers in India to remit money back to their families in Nepal.

In August 2021, the Scheme was enhanced to boost the trade payments between the two countries, and to facilitate payments relating to retirement, pension, etc., to our ex-servicemen who have settled / relocated in Nepal.

1. What is Electronic Clearing Service (ECS)? +

ECS is an electronic mode of payment / receipt for transactions that are repetitive and periodic in nature. ECS is used by institutions for making bulk payment of amounts towards distribution of dividend, interest, salary, pension, etc., or for bulk collection of amounts towards telephone / electricity / water dues, cess / tax collections, loan instalment repayments, periodic investments in mutual funds, insurance premium etc. Essentially, ECS facilitates bulk transfer of monies from one bank account to many bank accounts or vice versa. ECS includes transactions processed under National Automated Clearing House (NACH) operated by National Payments Corporation of India (NPCI).

1. What is the Banking Ombudsman Scheme ? +

The Banking Ombudsman Scheme is an expeditious and inexpensive forum for bank customers for resolution of complaints relating to certain services rendered by banks. The Banking Ombudsman Scheme is introduced under Section 35 A of the Banking Regulation Act, 1949 by RBI with effect from 1995. Presently the Banking Ombudsman Scheme 2006 (As amended upto July 1, 2017) is in operation.

The Government of India issues securities in order to borrow money from the market. One way in which the securities are offered to investors is through auctions. The government notifies the date on which it will borrow a notified amount through an auction. The investors bid either in terms of the rate of interest (coupon) for a new security or the price for an existing security being reissued. Since the process of bidding is somewhat technical, only the large and informed investors, such as, banks, primary dealers, financial institutions, mutual funds, insurance companies, etc generally participate in the auctions. This left out a large section of medium and small investors from the primary market for government securities which is not only safe and secure but also give market related rates of return. The Reserve Bank of India has announced a facility of non-competitive bidding in dated government securities on December 7th 2001 for small investors.

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1. Who can participate in the Scheme ? +

Participation in the Scheme of non-competitive bidding is open to individuals, HUFs, firms, companies, corporate bodies, institutions, provident funds, trusts and any other entity prescribed by RBI. As the focus is on the small investors lacking market expertise, the Scheme will be open to those whodo not have current account (CA) or Subsidiary General Ledger (SGL) account with the Reserve Bank of Indiado not require more than Rs.one crore (face value) of securities per auctionAs an exception, Regional Rural Banks (RRBs), Urban Cooperative Banks (UCBs) and Non-banking Financial Companies (NBFCs) can also apply under this Scheme in view of their statutory obligations. However, the restriction in regarding the maximum amount of Rs. one crore per auction per investor will remain applicable.

Department of Banking Operations & Development
Central Office

Index

Department of Banking Operations & Development
Central Office
Index

I. Domestic Deposits

II. NRI Deposits

III. Advances

IV. Advances against shares and debentures

V. Donations

VI. Premises Loan

VII. Service charges

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1. Whether banks can accept interest free deposits ? +

Banks cannot accept interest free deposits other than in current account.

Who is eligible to advertise on Foreign Satellite Channels? +

Exporters whose export earnings are Rs.10 lakhs or more during each of the preceding two years, or where the payment is to be made out of funds held in RFC or EEFC account of the remitter, are permitted by authorised dealers to make remittance for advertisement on foreign television, in terms of Foreign Exchange Management (Current Account Transactions) Rules, 2000 made by Government of India, vide Notification G.S.R.381(E) dated May 3, 2000. All other cases need to be referred by the authorised dealer to the Reserve Bank of India, for prior approval, before effecting any remittance.

1. Does QA 22 Account continue under Foreign Exchange Management Act, 1999 ? +

No. With the introduction of Foreign Exchange Management Act, 1999, the accounts opened by foreign nationals who are resident in India are treated as resident accounts. Such accounts are at par with other resident Rupee accounts.