FCNR Account

By

Pranab Namchoom
Management Trainee
Punjab National Bank

DEFINITION

ein a Non Resident Individual of Indian Nationality or Indian Origin can main
by the holder of power of attorney in India.
n currency through normal banking channel, which are of repatriable nature in term

Who Can Open FCNR?

PIOs in foreign currency. Thus, FCNRs are not savings accounts but fixed de
RBI)

ers are persons of Indian nationality or origin

shall be eligible to operate the account as a Power of Attorney holder in acc

Currencies Allowed(Only For PNB)

ny permitted currency. 'Permitted currency' for this purpose would mean a

Features of FCNR Account -I

n be opened only by NRIs or by Person of Indian Origin (PIO)

an be opened only in the Foreign Currencies specified above and thus the currency fluctuatio
paid on the FCNR Account

aturity of more than 1 year and less than 5 years can only be opened

Features of FCNR Account II

ll as with Resident Indians

dent can be made a nominee

cost to the account holder.

d of. However, the Loans cannot be used for the purpose of relending, carrying on agricultural

Advantages Of FCNR I

n currency.

with another person resident in India is not permitted.

Dollar, Yen and Euro.
a To foreign Country) In other words, the interest earned and the deposit am

Advantages Of FCNR II
for not less than 1 year and not more than 5 years.

offer FCNR accounts set the interest rates within the ceiling as announced by the Reserve

m deposits are payable after the end of first year. Interest is compounded on a half-yearly(1

held in the FCNR accounts can be provided to account holder for any investment in India.

ide loans to firms or companies against the collateral of FCNR accounts.

Disadvantage Of FCNR-I

interest is payable.
s can be taken by account holders only.
not for current, savings and recurring accounts.
nts before maturity. However, penalties will apply for premature withdrawals. Also, swapping charges a
maturity, failing which, the bank will fix interest rate on renewal. If renewed accounts are withdrawn bef

Disadvantage Of FCNR-II

of India, under the Indian Income Tax Act frames the tax rules, which are subject to change.
cases, Greek citizens, were reportedly, restricted from withdrawing over 40 euros from their accounts
ccounts in India to around Rs. 100,000 or 1600 USD, which is considered low. Many experts, therefor

Docs Required For Opening FCNR Account

ent, income documents may be required. Document requ

Payment Of Interest

year, interest at the applicable rate will be paid without any compounding effect.
or more than one year, interest can be paid at intervals of 180 days each and thereafter for remainin
h 1, 2014
ss than 3 year maturity, interest shall be paid within the ceiling rate of LIBOR/ SWAP rates plus 200 b
aturity, interest shall be paid within the ceiling rate of LIBOR/ SWAP rates plus 300 basis points.

Interest Rate Table(PNB)

Open With Funds

ermitted currencies, with / out of the funds received as foreign inw

an FCNR account. He/she can do this either as a wire transfer or

lers Cheques when you visit India

versa permitted without the prior approval of RBI.

Premature Withdrawal of FCNR

nterest is levied on the same. The Penal Interest charged is different b

rease in the Interest Rates, for a period more than the unexpired

FCNR Account after change in Residential Status

maturity date at the contracted rate of interest even after the acco
n RFC account or the Resident Rupee Deposit account.

Important Links

https://www.rbi.org.in/scripts/FAQView.aspx?Id=69
https://www.pnbindia.in/upload/En/FAQs%20FCNR.pdf

THANK YOU