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com

NON RE5IDENT AND FOREIGN CURRENCY ACCOUNT5
Who is a Non Rosidonl. Tho Ioioign Lxchango Managononl Acl, 1999 dofinos a Non iosidonl as a poison
vho is nol iosidonl in India. This viII incIudo:
1. Any Indian cilizon iosiding alioad foi onpIoynonl, lusinoss, vocalion oi any olhoi puiposo in
ciicunslancos vhich indicalo his inlonlion lo slay oulsido India foi an indofinilo poiiod.
2. Ioisons of Indian oiigin hoIding a passpoil issuod ly a foioign counliy iosiding alioad. This is
sliiclIy nol an NRI lul is incIudod in lhis calogoiy as nosl lonofils loing offoiod lo NRIs aio aIso
offoiod lo Ioisons of Indian oiigin (IIO).
3. An Indian Covoinnonl soivanl poslod alioad on duly vilh Indian nission oi siniIai agoncios
sol up alioad ly lho govoinnonl of India.
4. An Indian govoinnonl soivanl dopulod alioad on assignnonls vilh foioign govoinnonls oi
inloinalionaI agoncios Iiko lho WoiId ank, IMI, WHO, olc.
5. An officoi of lho Slalo govoinnonl/pulIic socloi undoilaking dopulod alioad foi lonpoiaiy
assignnonl oi poslod lo lhoii offico alioad.
6. An Indian sludonl vho goos alioad lo sludy (AI (Dii Soiios) CiicuIai No. 45 dalod Doconloi 8,
2OO3).
7. An Indian sludonl vho lakos up a jol alioad afloi sludios in a foioign univoisily.
8. LaiIioi ovoisoas conpanios, pailnoiship fiins, sociolios olc. vhich aio ovnod lo lho oxlonl of al
Ioasl 6O ly Non iosidonls of Indian nalionaIily oi oiigin as voII as ovoisoas liusls in vhich al
Ioasl 6O of lho lonoficiaI inloiosl is iiiovocalIy hoId ly such poisons voio poinillod lo opon
NRL accounls. To opon lho accounls in lho nanos of lhoso lodios, a coilificalo iogaiding
nininun 6O hoIding ly Non iosidonls of Indian nalionaIily oi oiigin vas ioquiiod fion an
ovoisoas audiloi/chailoiod accounlanl/coilifiod pulIic accounlanl. A.I. (Dii Soiios) CiicuIai
No.14 dalod 16
lh
Soplonloi 2OO3, doiocognisos lho Ovoisoas Coipoialo odios (OCs) as an
Invosloi CIass and aII doposils hoId ly OCs nood lo lo iopaid.
Non iosidonl Indians (NRI) vholhoi lhoy lo individuaIs, coipoialos of associalions of poisons can
nainlain lank accounls vilh aulhoiizod doaIois in India. Aulhoiizod doaIois in lhis inslanco aio
connoiciaI lanks. Tho Rosoivo ank has poinillod sono coopoialivo lanks lo aIso opon accounls foi
Non iosidonl Indians. Tho accounls oponod ly NRIs can lo cIassifiod undoi:
I) Rupoo dononinalod Accounls
II) Ioioign Cuiioncy dononinalod Accounls
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I) Rupcc DcnnmInatcd Accnunts
a) Nnn rcsIdcnt (OrdInary) Accnunt (NRO)
Whonovoi an Indian iosidonl goos alioad foi onpIoynonl oi if ho onigialos, his lank accounls aio
dosignalod as Non-Rosidonl (Oidinaiy) accounls (NRO Accounls). Thoso aio aIso accounls of Non
Rosidonls vho iocoivo incono oi olhoi nonios in India in iupoos. LaiIioi lhoio voio nany iosliiclions on
ils iopaliialiIily.
NRO accounls can lo hoId ly Non iosidonl Indian nalionaIs oi Non iosidonls of Indian oiigin oilhoi
singIy oi joinlIy vilh iosidonls oi olhoi Non iosidonls. Ovoisoas conpanios, fiins, sociolios and olhoi
ovoisoas lodios vhich aio ovnod diioclIy oi indiioclIy lo lho oxlonl of al Ioasl 6O ly NRIs and ovoisoas
liusls (ovoisoas coipoialo lodios) in vhich al Ioasl 6O of lho lonoficiaI inloiosl is iiiovocalIy hoId ly
such poisons (NRIs) voio aIso oIigilIo foi oponing an NRO accounl. Hovovoi A.I. (Dii Soiios) CiicuIai
No.14 dalod 16
lh
Soplonloi 2OO3, doiocognisos Ovoisoas Coipoialo odios (OCs) as an Invosloi CIass
and accounls hoId ly OCs havo lo lo cIosod.
Whonovoi an Indian is piocooding alioad foi an indofinilo poiiod oi is pIanning lo Iivo and voik alioad,
ho nusl infoin his lank lo havo his Rosidonl Accounl iodosignalod as a Non iosidonl oidinaiy accounl.
Thoso vho piocood alioad foi nodicaI lioalnonl oi lusinoss visils aio nol lo havo lhoii accounls
iodosignalod as lhoio is no oxpioss inlonlion of slaying oulsido India foi an uncoilain, indofinilo poiiod.
Wilh iogaid lo sludonls, lasod on iopiosonlalions iocoivod AI(Dii Soiios) 45 dalod Doconloi 8, 2OO3
cIassifios lhon as Non iosidonls undoi ILMA.
On ioluining lo India NRIs shouId infoin lhoii lank/s of lhoii chango in slalus fion non iosidonl lo
iosidonl. Tho accounl lhal ho nainlains/ viII nainlain vouId lo iodosignalod. An NRI on a shoil visil
doos nol nood lo havo his accounl iodosignalod.
A foioign nalionaI of Indian oiigin, as a louiisl oi olhoiviso can opon NRO accounls foi nooling IocaI
oxponsos. An NRO Accounl can lo oponod vilh funds liansfoiiod fion alioad in fiooIy convoililIo
foioign cuiioncy in an appiovod nannoi oi ly funds fion any IocaI souico iopiosonling lona fido
liansaclions in iupoos oi ly liansfoi fion iupoo accounls of non iosidonl lanks oi fion an oxisling
NRL/ICNR () doposil Accounl oi fion foioign cuiioncy lioughl aIong on a visil oi vilh liavoIois
choquo. Hovovoi on oponing an accounl vilh foioign oxchango ovoi US$5OOO, a copy of cuiioncy
docIaialion foin (CDI) is ioquiiod ly lho lank (as pioof lhal il cano lhiough Iogilinalo channoIs). Iovoi
of alloinoy (IOA) hoIdois can lo aulhoiizod lo opoialo lhis accounl. As a louiisl a Non iosidonl can pIaco
nonios in a doposil accounl (fixod doposil). If lho doposil is hoId foi noio lhan six nonlhs, lhon lo
iopaliialo lho anounl, poinission fion lho RI vouId lo ioquiiod.
Rupoo accounls of lho calogoiy nonlionod loIov aio lioalod as iosidonl accounls foi oxchango conlioI
puiposos
(i) Indian, NopaIoso oi hulanoso in NopaI & hulan
(ii) Officos and lianchos silualod in NopaI oi hulan of any lusinoss caiiiod on ly a
conpany oi a coipoialion incoipoialod oi oslalIishod undoi any Iav in foico in India,
NopaI oi hulan.
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(iii) Officos and lianchos silualod in NopaI oi hulan of any lusinoss caiiiod on as a
pailnoiship fiin oi olhoiviso ly Indians, NopaIoso oi hulanoso.
Il shouId aIso lo nolod lhal iupoo accounls nainlainod in India ly foioign govoinnonls and govoinnonl
oiganizalions oulsido India aio govoinod ly ioguIalions appIicalIo lo accounls nainlainod ly non
iosidonl lanks. Thoy aio nol suljocl lo ioguIalions Iaid dovn undoi NRO accounls.
NRO accounls can lo savings oi cuiionl oi fixod doposil accounls. Thoso can lo hoId joinlIy vilh
iosidonls and/oi non iosidonls. Savings accounls nay lo oponod onIy foi individuaIs. Iunds fion NRO
accounls cannol noinaIIy lo ionillod alioad oi liansfoiiod lo oxloinaI accounls of lho accounl hoIdoi oi
liansfoiiod oul of India vilhoul Rosoivo ank poinission. Ropaliialion foi Iinilod puiposos aio aIIovod.
Inloiosl, dividond, ponsion and cuiionl incono ciodilod lo NRO accounls can lo ionillod alioad (afloi
paynonl of laxos). Tho Rosoivo ank viII aIso considoi appIicalion foi ionillanco of funds doiivod ly
ionillancos fion alioad. This viII havo lo lo piovod lo lho Rosoivo ank (RI) and lho ionillanco can
onIy lo nado afloi appiovaI is iocoivod.
Inloiosl oainod on lho laIancos hoId in lhis accounl is al lho sano ialos as iosidonl accounls (CuiionlIy 3.5
poi conl), and can lo iopaliialod (vilhoul piioi poinission fion RI) afloi paynonl of appIicalIo laxos.
Tho concossions aIIovod undoi Soclion 8OL of lho Incono Tax Acl, 1961 aio aIso avaiIalIo lo individuaIs
and HUI accounl hoIdois.
Ciodils lo lhis accounl can lo in lho foin of dividonds, inloiosl, ponsion, ionl and olhoi cuiionl incono
and can lo iopaliialod on fuIfiIIing coilain condilions and on poinission fion RI. RI has poinillod
caid hoIdois lo sollIo chaigos foi lho uso of InloinalionaI Ciodil Caids oul of funds hoId in Caid HoIdois
NRO Accounl.
AI (Dii soiios) ciicuIai 1 dalod }uIy 2, 2OO2 and CiicuIai No. 19 dalod Soplonloi 12, 2OO2 poinillod NRIs
and IIOs lo iopaliialo funds in lhoii NRO accounls (vilhoul lho piioi poinission of lho RI) foi lho
foIIoving puiposos:
O Lducalion uplo $3O,OOO
O ModicaI oxponsos uplo $1OO,OOO
O SaIo piocoods of innovalIo piopoily hoId foi alIoasl 1O yoais uplo $ 1OO,OOO poi caIondoi yoai.
O Iiocoods of assols soId ly foioign nalions vhich voio acquiiod ly NRIs/ IIOs ly vay of
inhoiilanco/ Iogacy uplo 1OO,OOO poi caIondoi yoai.
AI (Dii soiios) CiicuIai No. 67 dalod }anuaiy 13, 2OO3 has ionovod lho diffoionl naxinun anounls
ionillalIo in a yoai and onhancod lho Iinil lo $ 1 niIIion. Tho ionillanco can lo nado on pioduclion of
an undoilaking/ coilificalo. This vas lo lo poinillod uplo }uno 3O, 2OO3. AI (Dii soiios) CiicuIai No. 1O4
dalod May 31, 2OO3 has oxlondod lhis dalo liII fuilhoi nolico. Thoio is hovovoi a piohililion iogaiding lho
iopaliialion of assols lo cilizons of Iakislan, angIadosh, Sii Lanka, Afghanislan, Iian, NopaI and hulan.
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AI (Dii soiios) CiicuIai No.62 dalod }anuaiy 31, 2OO4 has lioughl oul coilain cIaiificalions iogaiding
vaiious aspocls of iopaliialion Iiko oIigiliIily ciiloiia, puiposo and lho coiIing foi iopaliialion olc.
RoIovanl poinls aio as foIIovs:
O Tho IiloiaIizod ionillanco faciIily is avaiIalIo foi any lonafido puiposo.
O Tho faciIily is avaiIalIo foi aII foioign nalionaIs oxcopl lho cilizons of NopaI oi hulan.
O SaIo piocoods of shaios and socuiilios aio oIigilIo foi iopaliialion.
O SaIo piocoods of innovalIo piopoily, acquiiod oul of iupoo fund hoId foi Ioss lhan 1O yoais can aIso
lo ionillod piovidod lho saIo piocoods havo loon hoId foi lho laIanco poiiod in a NRO accounl oi
in any olhoi oIigilIo socuiily lul such invoslnonl nusl lo liacoalIo lo lho saIo piocoods of lho
innovalIo piopoily.
O Thoio is no Iock- in-poiiod in poiiod in iospocl of innovalIo piopoily acquiiod ly vay of
1. Inhoiilanco
2. Ioioign cuiioncy funds (lhiough invaid ionillanco oi ly dolil lo ICNR/ NRL accounls.
Il is ovidonl lhal lho RI has nado iopaliialion noio IiloiaI in loins of oIigiliIily ciiloiia, puiposo and
lho Iikos locauso lho ciicuIai poinils ionillanco foi any lonafido puiposo as againsl lho iosliiclions lhal
usod lo oxisl. Iiohililions oxisl onIy foi lhoso vho aio cilizons of NopaI and hulan. AI (Dii Soiios)
CiicuIai No. 59 dalod Doconloi 9, 2OO2 aIso poinils Non Rosidonl Indians and Ioisons of Indian oiigin
lo pay InloinalionaI Ciodil Caid (ICC) fion funds hoId in NRO accounls.
Non iosidonls aio poinillod an ovoidiafl up lo a Iinil of Rs.5O,OOO ILM (Doposil) RoguIalions 2OOO) oi as
slipuIalod ly lho RI (fion lino lo lino) in lhoii savings accounl suljocl lo lho foIIoving loins:
O Tho lonpoiaiy ovoidiafl aIong vilh inloiosl payalIo nusl lo ioguIaiizod vilhin a naxinun
poiiod of lvo vooks.
O Tho ovoidiafl has lo lo ioguIaiizod fion lho piocoods of fiosh foioign invaid ionillanco oi oul of
Iogilinalo funds fion alioad oi fion lho accounl hoIdois Non Rosidonl (LxloinaI) accounl oi
foioign cuiioncy doposils.

Inloiosl oainod on NRO savings and fixod doposils accounls is laxalIo al 3O pIus suichaigo al lho lino
inloiosl is paid ly lho lank. To avoid doduclion of lax al souico an NRI can sulnil a docIaialion lo lho
lank slaling lhal ho is a iosidonl lul nol oidinaiiIy iosidonl (RNOR) al lho loginning of ovoiy financiaI
yoai.
Docunonls ioquiiod foi oponing NRO Accounls aio:
1) Coilifiod liuo copios of passpoil.
2) Coilifiod liuo copy of Visa/Rosidonl poinil/CIR Caid oi any pioof of iosidonco alioad.
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3) Copy of Ialosl conliacls vilh lho conpany onIy in lho caso of poisons onpIoyod on a ship. In caso of
docunonls aio sonl ly naiI aII docunonls/signaluio/ signod phologiaphs noods lo lo alloslod ly
Tho Indian Lnlassy/Ovoisoas nolaiy /OfficiaI of lho lank in vhich lho accounl is lo lo oponod.
-) Nnn rcsIdcnt (Nnn-rcpatrIa-c) Rupcc DcpnsIts (NRNR)
Thoso accounls havo loon disconlinuod vilh offocl fion ApiiI 1 2OO2. anks aio nol poinillod lo accopl
fiosh doposils in lhis calogoiy. Ovoiduo NRNR doposils aio nol lo lo ionovod. If naluiod and ovoiduo
NRNR doposil iocoipls aio piosonlod foi ionovaI afloi ApiiI 1, 2OO2, lho laIanco is lo lo ciodilod lo lho
NRL accounl of lho doposil hoIdois (AI (Dii Soiios) CiicuIai No. 6O dalod Doconloi 1O, 2OO2). ul nol lo
ICNR() accounls (DOD.Dii.C 9/13.O3.OO/2OO4-O5 dalod }uIy 16, 2OO4) If hovovoi lho NRNR doposil
hoIdoi doos nol havo a NRL accounl, lho naluiily piocoods can lo iopaliialod. If lho NRNR doposils
hoIdoi has locono a iosidonl, lhon lho piocoods can lo ciodilod lo a Rosidonl Ioioign Cuiioncy (RIC)
accounl.
Tho convoision of an NRNR doposil inlo an NRO doposil lofoio naluiily viII lo suljocl lo lho ponaI
piovision ioIaling lo pionaluio vilhdiavaI.
c) Nnn RcsIdcnt (5pccIa) Rupcc Accnunts (NR5R)
Thoso accounls havo loon disconlinuod vilh offocl fion ApiiI 1, 2OO2. Lxisling NRSR accounl olhoi lhan
loin doposils aio nol lo conlinuod afloi Soplonloi 3O, 2OO2. Tho laIanco is lo lo liansfoiiod lo lho NRO
accounl of lho accounl hoIdoi.
Tho convoision of a NRSR doposil lo an NRO doposil lofoio naluiily viII lo suljocl lo lho ponaI
piovision ioIaling lo pionaluio vilhdiavaI.
AI (DIR Soiios) CiicuIai No. 28 dalod Maich 4, 2OO2 slalos lho naluiily piocoods of NRNR doposils nay
lo ciodilod lo NRL Accounls. AI (DIR Soiios) CiicuIai No. 26 dalod Soplonloi 28, 2OO2 lhal lho piocoods
of NRNR doposils on naluiily nay lo iopaliialod oulsido India if lho accounl hoIdoi doos nol nainlain
an NRL accounl.
d) Nnn rcsIdcnt (Extcrna) Rupcc Accnunt (NRE)
Non Rosidonl LxloinaI Accounls (NRL) aio accounls hoId ly non iosidonls vilh lanks in India. Thoso aio
oponod vilh convoililIo foioign cuiioncy and lho laIancos can lo iopaliialod al viII alioad.
LaiIioi an NRL accounl had lo lo oponod vhon lho NRI vas on a visil (unIoss lhoio vas a lianch in lho
counliy lho NRI vas iosidonl in). Nov duo lo lho Inloinol, a zoio laIanco accounl can lo oponod fion
anyvhoio in lho voiId.
An NRL cuiionl accounl can lo oponod ly ovoisoas conpanios, fiins, sociolios and olhoi ovoisoas
lodios, vhich aio ovnod diioclIy oi indiioclIy lo lho oxlonl of al Ioasl 6O ly NRIs and ovoisoas liusls
in vhich al Ioasl 6O of lho lonoficiaI inloiosl is iiiovocalIy hoId ly such poisons (NRIs). Hovovoi A.I.
(Dii Soiios) CiicuIai No.14 dalod 16
lh
Soplonloi 2OO3, doiocognisos lho Ovoisoas Coipoialo odios
(OCs) as an Invosloi CIass and lhoso doposils havo lo lo iopaid.
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Inloiosl iocoivod on an NRL Accounl is oxonpl fion Incono Tax foi individuaIs.
A NRL accounl has lo lo oponod ly lho non iosidonl in foioign cuiioncy oi ly an invaid ionillanco in
foioign cuiioncy.
Aulhoiisod DoaIois/Aulhoiisod anks aio poinillod lo accopl lhoso doposils as poi A.I. (DIR Soiios)
CiicuIai No.89 dalod ApiiI 24, 2OO4. Hovovoi, olhois nay conlinuo lo hoId and ionov oxisling doposils
hoId in lhoii looks in lho nano of NRIs on iopaliialion oi non-iopaliialion lasis. Tho inloiosl oainod on
such doposils viII conlinuo lo lo oIigilIo foi iopaliialion.

Il cannol lo oponod ly lho non iosidonls povoi of alloinoy (IOA) hoIdoi in India. Tho accounl oponoi
nusl, al lho lino of oponing lho accounl, undoilako lo infoin lho ank on ioIocaling poinanonlIy lo
India. If lho accounl is oponod ly lho accounl hoIdoi fion oulsido India, lho appIicalion foin shouId lo
signod/alloslod ly an Indian onlassy oi nolaiy pulIic alioad. Tho accounl can lo oponod ly lho non
iosidonl duiing his visil lo India vilh liavoIois choquos. Tho ank has lho iosponsiliIily lo salisfy ilsoIf
lhal lho accounl is in oidoi and lho accounl oponoi is indood a non iosidonl. This is noinaIIy ly chocking
lho individuaIs passpoil. NoinaIIy an NRL accounl cannol lo oponod ly liansfoi fion a NRO accounl.
Il can lo dono if lho RI poinils lho liansfoi. NRL accounls can ho hoId joinlIy vilh anolhoi non iosidonl
of Indian oiigin. A joinl accounl vilh a poison iosidonl is nol poinissilIo (DOD.No. Dii. C.
78/13.O3.OO/2OO3-O4 dalod ApiiI 22, 2OO4 and Masloi CiicuIai No.DOD.Dii.C.11/13.O3.OO/ 2OO3-O4
dalod Augusl 14, 2OO3).

Inloiosl oainod on lhoso accounls voio lax-fioo uplo lho inlioduclion of lho Iinanco iII 2OO4 vhon il vas
pioposod lhal lho inloiosl on lhoso aio IialIo foi lax. Thoso accounls aio fiooIy convoililIo lo foioign
cuiioncy and can lo ionillod alioad.
NRL accounls can lo oponod as a savings accounl oi cuiionl accounl oi iocuiiing doposil accounl oi loin
doposil accounl. A savings/cuiionl accounl hoIdoi is onlilIod lo a choquo-look. Tho lonuio of lhoso loin
doposils iangod fion 1 yoai lo 5 Yoais. Hovovoi fion ApiiI 29, 2OO3 lho naluiily poiiod of NRL doposils
is lo lo fion ono lo lhioo yoais. This appIiod lo NRL doposils ionovod afloi lhoii naluiily. If a lank
vishos lo accopl doposils foi a poiiod Iongoi lhan lhioo yoais il nay do so piovidod lho inloiosl is nol
highoi lhan lhal appIicalIo lo 3 yoai NRL doposils (Masloi CiicuIai dalod Augusl 14, 2OO3 annoxuio II)
Tho poiiod of iopaliialIo NRL doposils is ono lo lhioo yoais and lho inloiosl ialos as doloininod foi 3
yoai doposils vouId lo appIicalIo foi doposils vhoso naluiily oxcoods lhioo yoais. Thoso ialos viII lo
appIicalIo lo NRL doposils ionovod afloi lhoii naluiily poiiod (MII.C.238/O7.O1.279/2OO3-2OO4 dalod
Soplonloi 15, 2OO3).
A povoi of alloinoy (IOA) oi Iolloi of aulhoiily (LOA) can lo givon lo a iosidonl foi opoialionaI
puiposos. Tho hoIdoi can vilhdiav nonoy fion lho accounl foi IocaI disluisononls oi foi poinissilIo
invoslnonls on lohaIf of lho NRI. Thoy can opon oi ionov fixod doposils ly using NRL savings accounls
lul cannol vilhdiav oi doposil foioign cuiioncy nolos. Tho IOA hoIdoi cannol iopaliialo funds hoId in
India lo accounls oulsido India oi nako gifls on lohaIf of lho accounl hoIdoi lo accounls hoId foi poisons
iosidonl alioad.
Tho inloiosl paid on lhoso accounls foi loin doposils is 1OO lasis poinls alovo lho USD LIOR/SWAI
ialos of lho coiiosponding naluiily (MID.C.238/O7.O1.279/2OO3-2OO4 dalod Soplonloi 15, 2OO3). DOD
No. Dii C 36/13.O1.O9/2OO3-O4 dalod Ocloloi 18, 2OO3 slipuIalod lhal lho inloiosl ialos on Non-Rosidonl
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(LxloinaI) Rupoo (NRL) doposils foi ono lo lhioo yoais naluiily shouId nol oxcood 25 poinls alovo lho
LIOR/SWAI ialos foi US doIIai of coiiosponding naluiily.

DOD No. Dii C 76/13.O1.O9/2OO3-O4 dalod ApiiI 17, 2OO4 slalos lhal inloiosl ialos on Non-Rosidonl
(LxloinaI) Rupoo (NRL) doposils foi ono lo lhioo yoais naluiily, conliaclod offoclivo cIoso of lusinoss in
India on ApiiI 17, 2OO4, shouId nol oxcood lho LIOR/SWAI ialos foi US doIIai of coiiosponding
naluiily. Tho inloiosl ialos viII aIso appIy lo NRL doposils ionovod afloi lhoii piosonl naluiily poiiod.

Tho inloiosl on Savings Accounl vas al pai vilh donoslic doposils i.o. 3.5 poi conl. Iion ApiiI 17, 2OO4
(DOD No. Dii C 76/13.O1.O9/2OO3-O4) inloiosl ialo on NRL savings doposils aio aIso Iinkod lo
LIOR/SWAI ialos. Il nusl nol oxcood lho LIOR/SWAI ialos foi six-nonlh naluiily on US doIIai
doposils and aio lo lo fixod quailoiIy on lho lasis of lho LIOR/SWAI ialo of lho US doIIai on lho Iasl
voiking day of lho piocoding quailoi.
Ioi opoialionaI puiposos inloiosl ialos shouId lo ioundod off lo lho noaiosl docinaI poinl (3.67 viII lo
3.7 and 3.64 viII lo 3.6). This is slalod in MID. C.237/O7.O1.779/2OO3-O4 dalod }uIy 17, 2OO3.
A Ioan againsl lho laIancos hoId on NRL accounl is aIso poinissilIo. Hovovoi lho Ioan is sanclionod
suljocl lo coilain spocific consliainls as lo ils uliIizalion.
Thoso accounls havo sovoiaI alliaclions.
O Tho laIanco in lhoso accounls incIuding inloiosl can lo iopaliialod oulsido India al any lino,
vilhoul iofoiiing lo lho Rosoivo ank of India (RI).
O Tho inloiosl on doposils on lhoso accounls and any olhoi incono acciuing on lhoso accounls aio
fioo of Indian Incono Tax (lhis is foi individuaIs).
O Tho laIanco hoId undoi lhoso accounls aio oxonpl fion WoaIlh Tax.
O As lho accounl hoIdoi can vilhdiav savings doposils al any lino, lanks shouId nol naik any
lypo of Iion, diiocl oi indiiocl, againsl lhoso doposils. (DOD No. Dii C 76/13.O1.O9/2OO3-O4
dalod ApiiI 17, 2OO4).

Invoslnonls can lo nado on a iopaliialion lasis in unils of lho Unil Tiusl of India / Covoinnonl Dalod
Socuiilios/Tioasuiy iIIs/ Unils of any donoslic nuluaI fund / onds issuod ly a ISU / Shaios in
IulIic Socloi Lnloipiisos loing dis-invoslnonl ly lho Covoinnonl of India / Shaios and convoililIo
dolonluios of Indian conpanios lhiough slock oxchangos undoi IoilfoIio Invoslnonl Schono/ Doposils
vilh Indian conpanios, non-lanking financo conpanios iogisloiod vilh RI, HICs and olhoi IIs.
O Invoslnonl on non-iopaliialion lasis can lo nado in unils of nonoy naikol nuluaI funds/ lho
capilaI of a concoin nol ongagod in any agiicuIluiaI oi pIanlalion aclivily oi ioaI oslalo lusinoss/
Lxchango Tiadod Doiivalivo conliacls appiovod ly SLI.
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O InnovalIo piopoilios, ConliaI and slalo govoinnonl socuiilios and NalionaI Saving Coilificalos
can lo puichasod fiooIy fion lho laIancos hoId in lhis accounl.
O This accounl has a choquo look faciIily.
NRL accounls can lo fiooIy convoilod lo ICNR () doposil accounls al lho lanks soIIing ialo foi lho
cuiioncy and vico voisa. Tiansfois can lo nado fion lho NRL accounl of ono poison lo lho NRL accounl
of anolhoi. Noninalion faciIily is avaiIalIo in favoui of any ono poison. Tho noninoo can lo a iosidonl
Indian oi a non iosidonl. Aulhoiizod doaIois aio poinillod lo aIIov ionillanco of funds Iying in lho NRL
accounl of a docoasod poison lo his non iosidonl noninoo.
In iogaid lo lho opoialion of a NRL accounl lhoio aio iosliiclions iogaiding vhal nay lo ciodilod and
dolilod. Thoso aio:
CrcdIts
Ciodils nusl cono fion noinaI lanking channoIs oi doposils ly a NRI vhon on a visil lo India. Cash up
lo $5,OOO can lo doposilod. Anylhing highoi ioquiios pioof of lho NRI having signod lho Cuiioncy
DocIaialion Ioin (CDI) vhon Ianding in India.
A. Tiansaclions vhoio Ioin A4 doos nol nood lo lo conpIolod.
i) Inloiosl acciuing on NRL/ICNR () accounls
. Tiansaclions vhoio Ioin A4 is lo lo conpIolod
i) Iiocoods of foioign cuiioncy liavoIois choquos, diafls and poisonaI choquos
ii) Iiocoods of foioign oxchango ionillancos
iii) Iiocoods of foioign cuiioncy, lank nolos londoiod ly lho accounl hoIdoi duiing visil
lo India.
iv) Inloiosl on Covl. socuiilios/dividonds on unils of Unil Tiusl of India/ nuluaI funds
piovidod lho socuiilios/unils voio puichasod ly dolil lo lho accounl hoIdois
NRL/ICNR () accounl oi oul of invaid ionillanco lhiough noinaI lanking
channoIs.
v) Maluiily piocoods of govoinnonl socuiilios incIuding NalionaI IIan/Savings
Coilificalo as voII as saIo piocoods of such socuiilios and unils of nuluaI funds if
lhoso voio puichasod fion lho sano accounl.
vi) Rofund of Shaio/dolonluio sulsciiplion lo nov issuos of Indian conpanios if lho
sulsciiplion vas paid fion lho sano accounl
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vii) Tiansfois fion olhoi NRL/ICNR () accounls of olhoi poisons

viii) Rofund of appIicalion/oainosl nonoy nado ly houso, luiIding agoncios is duo lo
non aIIolnonl of fIal/pIol piovidod lho oiiginaI paynonls vas nado fion an ICNR
() /NRL accounl oi ly diiocl ionillanco.
Cuiionl inconos Iiko ionl, dividond, ponsion, inloiosl olc piovidod lho aulhoiizod
doaIoi is salisfiod lhal lho ciodils iopiosonl cuiionl incono of lho non iosidonl and
lho incono lax has loon doduclod/paid, and on pioduclion of appiopiialo coilificalo
fion a chailoiod accounlanl (AI( Dii Soiios) CiicuIai No. }uIy 15, 2OO2) .
Any olhoi ciodils as nay lo covoiod ly any gonoiaI oi spociaI poinission of lho RI.
Cuiionl incono nay lo ciodilod lo lho NRL Accounl of NRIs piovidod lho lank is
salisfiod lhal lho ciodil iopiosonls lho cuiionl incono of lho Non iosidonl accounl
hoIdoi and incono lax lhoioon has loon doduclod/ paid/ piovidod foi, as lho caso
nay lo (AI(DIR Soiios ) CiicuIai No. 26 dalod Soplonloi 28, 2OO2 and AI(DIR
Soiios) CiicuIai No. 5 dalod }uIy 15, 2OO2..
Dc-Its
i) LocaI disluisononl
ii) Tiansfoi lo NRL/ICNR () doposil accounls of lho sano accounl hoIdoi
iii) Tiansfoi of NRL/ICNR () doposil accounl of olhoi poisons
iv) Ronillancos oulsido India.
v) Invoslnonls in shaio/socuiilios/connoiciaI papoi of Indian conpany oi foi
puichaso of innovalIo piopoily in India piovidod lhoso invoslnonls aio covoiod ly
gonoiaI/spociaI poinission gianlod ly lho RI.
vi) SollIononl of chaigos foi lho uso of InloinalionaI Ciodil Caids oul of funds hoId in
Caid HoIdois NRL Accounl.
vii) Any olhoi liansaclion if covoiod undoi lho gonoiaI/spociaI poinission gianlod ly
RI.
viii) Loans uplo $25O,OOO lo cIoso ioIalivos (AI (Dii Soiios) ciicuIai No. 24 dalod
Soplonloi 27, 2OO3).
Any paynonls/ionillancos olhoi lhan foi lho puiposos of inpoils havo lo lo appIiod in foin A2. AII
olhoi liansaclions (doll and ciodil) nusl lo appiovod ly lho RI.
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Tho Rosoivo ank of India has poinillod aulhoiizod doaIois lo gianl Ioans lo non iosidonl Indians foi
ionovalion/iopaiis/inpiovononl lo iosidonliaI acconnodalion ovnod ly lhon in India.
Tho Rosoivo ank of India vido ils CiicuIai No. A.I. (DIR Soiios) No.1O1 has poinillod iopaliialion of
saIo piocoods of iosidonliaI acconnodalion puichasod ly NRIs/IIOs oul of funds iaisod ly lhon ly
vay of Ioans fion a lank lo lho oxlonl of such Ioan/s iopaid ly lhon oul of foioign invaid ionillanco
iocoivod oi ly dolil lo lhoii NRL/ICNR accounls.
On lho accounl hoIdoi ioluining lo India and loconing a iosidonl lho accounl viII lo iodosignalod as a
iosidonl iupoo accounl oi convoilod lo RIC accounl (if oIigilIo and on oxoiciso of lho oplion avaiIalIo). In
iogaid lo inloiosl incono afloi lho accounl hoIdoi ioluins lo India, inloiosl viII lo al lho ialo oiiginaIIy
agiood upon up lo naluiily (foi loin doposils).
NRIs can lako ovoidiafls up lo Rs. 5O,OOO. Thoso ovoidiafls havo lo lo ioluinod vilhin lvo vooks (vilh
inloiosl) ly an invaid ionillanco fion alioad oi ly liansfoi of funds hoId in olhoi NRL/ICNR accounls.
NRL accounls aio hoId in iupoos. Tho accounls aio lhoiofoio oxposod lo lho iisk of foioign oxchango
fIuclualions. Iuilhoinoio, as lho laIanco is in iupoos Iossos aio incuiiod vhon lho foioign cuiioncy is
convoilod lo say doIIais and lhon ioconvoilod lo doIIais vhon lho ionillancos oi paynonls havo lo lo
nado alioad.
Tho RI ly ils CiicuIai DOD.No.Dii.C.25/13.O1.O9/2OO3-O4 has piosciilod lhal lho inloiosl ialos on
fiosh iopaliialIo NRL doposils foi ono lo lhioo yoais conliaclod offoclivoIy Soplonloi 16
lh
2OO3 shouId
nol oxcood 1OO lasis poinls alovo lho LIOR/SWAI ialos foi lho US doIIai doposil of coiiosponding
naluiily. This vas anondod ly DOD.No.Dii.C.35/13.O1.O9/2OO3-O4 and
DOD.No.Dii.C.36/13.O1.O9/2OO3-O4 dalod Ocloloi 18, 2OO3 lhal offoclivo cIoso of lusinoss on Ocloloi
18, 2OO3, lho inloiosl ialo on fiosh iopaliialIo NRL doposils of ono lo lhioo yoais shouId nol oxcood 25
lasis poinls alovo lho LIOR/SWAI ialos foi lho US doIIai of coiiosponding naluiily.. Tho
LIOR/SWAI ialo on lho Iasl voiking day of lho piocoding nonlh vouId foin lho laso foi fixing coiIing
ialos lhal vouId lo offoclivo fion lho foIIoving nonlh. This ialo viII appIy lo inloiosl ialos on
iopaliialIo NRL Doposils ionovod.
Tho Rosoivo lank of India vido A.I. (Dii Soiios) CiicuIai No.21 dalod 23
id
Soplonloi, 2OO3 has cIaiifiod
lhal lho laIancos in lho LLIC and RIC (D) accounls nay lo aIIovod lo lo ciodilod lo NRL/ICNR ()
Accounl, al lho oplion/ioquosl of lho accounl hoIdois consoquonl upon chango in lho iosidonliaI slalus
fion iosidonl lo non-iosidonl.
Iaynonl of inloiosl on loin doposil naluiing on hoIiday/ Sunday/ non lusinoss voiking day

Tho lank shouId pay inloiosl al lho oiiginaIIy conliaclod ialo on lho doposil anounl foi lho hoIiday/
Sunday/ non voiking lusinoss day inloivoning lolvoon lho dalo of lho oxpiiy of lho spocifiod loin of
lho doposil and lho dalo of paynonl of lho piocoods of lho doposil on lho succooding voiking day.

Inloiosl on ovoiduo doposils A lank nay, al ils disciolion, ionov an ovoiduo doposil oi a poilion lhoioof
piovidod lho ovoiduo poiiod fion lho dalo of naluiily liII lho dalo of ionovaI (lolh days incIusivo) doos
nol oxcood 14 days. Tho ialo of inloiosl payalIo on lho anounl of lho doposil so ionovod shouId lo lho
appiopiialo ialo of inloiosl foi lho poiiod of ionovaI as piovaiIing on lho dalo of naluiily oi on lho dalo
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lho doposiloi sooks ionovaI, vhichovoi is lho Iovoi. In caso of ovoiduo doposils vhoio lho ovoiduo
poiiod oxcoods 14 days and if lho doposiloi pIacos lho onliio anounl of ovoiduo doposil oi a poilion
lhoioof as a fiosh NRL loin doposil, lho lank nay fix ils ovn inloiosl ialos foi lho ovoiduo poiiod on lho
anounl so pIacod as a fiosh doposil. Tho lank is fioo lo iocovoi lho inloiosl so paid foi lho ovoiduo
inloiosl if lho doposil is vilhdiavn lofoio conpIolion of lho nininun poiiod piosciilod undoi lho
schono, afloi ionovaI. DOD CiicuIai Dii. C. 69/ 13. O3.OO/ 2OO3-O4 dalod Ioliuaiy 13, 2OO4 aIso slalos
lhal lho oxisling insliuclions slalos lhal lanks aio fioo lo ionov ovoiduo doposils al an inloiosl ialo
piovaiIing on lho dalo of naluiily piovidod lho doposiloi appioachos lho lank vilhin 14 days fion lho
dalo of naluiily. In caso lho appIicalion is nado 14 days afloi lho dalo of naluiily lho ialo of inloiosl
offoiod shouId lo lho ialo piovaiIing on lho dalo of ionovaI of lho doposil. anks havo lho fioodon on lho
inloiosl payalIo foi lho poiiod lolvoon lho dalo of naluiily and dalo of ionovaI.
Rogaiding docoasod doposilois vhon lho cIainanls aio iosidonls, lho doposil on naluiily shouId lo
lioalod as a donoslic iupoo doposil and inloiosl shouId lo paid foi lho sulsoquonl poiiod al a ialo
appIicalIo lo lho donoslic doposil of a siniIai naluiily.
CiicuIai DOD No. Dii. C. 69/ 13. O3.OO/ 2OO3-O4 dalod Ioliuaiy 13, 2OO4 has nado svooping changos
iogaiding inloiosl paynonl on ovoiduo doposils. Tho RI has nov docidod lhal aII aspocls concoining
ionovaI of ovoiduo doposils nay lo docidod ly individuaI lanks suljocl lo lhoii oaid Iaying dovn a
lianspaionl poIicy in lhis iogaid and lho cuslonois loing nolifiod lho loins and condilions of ionovaI
incIuding inloiosl ialos, al lho lino of accoplanco of doposil. Tho poIicy shouId lo non-disciolionaiy and
non-disciininaloiy.
.Tho nasloi ciicuIai dalod Augusl 14, 2OO3 slalos lhal lanks shouId nainlain a ioasonalIo naigin on any
financiaI acconnodalion aIIovod againsl lho socuiily of a loin doposil and lhal lhoy nay doloinino lho
naigin on a caso lo caso lasis. Wilh iogaid lo inloiosl payalIo on a loin doposil slanding in lho nano of
a doposiloi vho has diod, inloiosl shouId lo paid al lho conliaclod ialo on lho naluiily of lho doposil. If
lho paynonl of lho doposil is nado lofoio lho naluiily dalo, lho lank shouId viII noinaIIy pay inloiosl
foi lho poiiod lho doposil has loon hoId (al lho ialo foi lho poiiod). No ponaIly viII lo chaigod. If lho
doposil is cIainod afloi lho dalo of naluiily (lho doposiloi dying lofoio lho naluiily dalo), lanks aio
ioquiiod lo pay lho conliaclod ialo of inloiosl liII lho dalo of naluiily. Afloi lhal dalo lho lank viII pay
sinpIo inloiosl al lho appIicalIo ialo opoialivo on lho dalo of naluiily foi lho poiiod lho doposil
ionainod in lho lank loyond lho naluiily dalo. If lho doposiloi diod afloi lho naluiily dalo, lanks viII
pay inloiosl al savings doposil ialo opoialivo on lho dalo of naluiily fion lho dalo of naluiily liII lho
dalo of paynonl.
If on lho ioquosl of cIainanls lho lank spIils lho anounl of loin doposil and issuos lvo oi noio iocoipls
individuaIIy in lho nanos of lho cIainanls, il shouId nol lo consliuod as a pionaluio vilhdiavaI if lho
anounl of lho doposil and lho poiiod doos nol undoigo any chango.
Rogaiding NRL doposils, if lho cIainanls aio iosidonls, lho doposil on naluiily shouId lo lioalod as
donoslic iupoo doposil and inloiosl paid foi lho sulsoquonl poiiod shouId lo al a ialo appIicalIo lo lho
donoslic doposil of a siniIai naluiily.
On iupoo dononinalod accounls, DOD ciicuIai DOD No. Dii.C. 69/13.O3.OO/2OO3-O4 dalod Ioliuaiy
14, 2OO4 slalos lhal on doposiis iopayalIo in Ioss lhan lhioo nonlhs oi vhoio lho loininaI quailoi is
inconpIolo, inloiosl shouId lo paid piopoilionaloIy foi lho acluaI nunloi of days iockoning lho yoai al
365 days. Tho RI poinils lanks lo iockon a yoai lo havo 366 days in a Ioap yoai vhiIo caIcuIaling
inloiosl. Il is aIso slalod lhal lanks shouId adviso lhoii cuslonois hov lhoy caIcuIalo inloiosl vhiIo
accopling doposils and shouId dispIay lhis al lhoii lianchos.
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II) FnrcIgn Exchangc dcnnmInatcd accnunts

(c) FnrcIgn Currcncy (Nnn rcsIdcnt) DcpnsIt Accnunts (FCNR (B))
In lho Masloi CiicuIai on inloiosl ialos on doposils hoId in ICNR (anks) Accounls (RI / 2OO4-O5 /42
DOD No. Dii. C. 8 /13.O3.OO/2OO4-O5 DATLD }uIy 14, 2OO4) lho loin Doposil has loon dofinod. Tho
doposils undoi lho Schono, noan loin doposils iocoivod ly lho lank foi a fixod poiiod and
vilhdiavalIo onIy afloi lho oxpiiy of lho said fixod poiiod and shaII aIso incIudo Roinvoslnonl Doposils
and Cash Coilificalos oi olhoi doposils of siniIai naluio.

ICNR () doposil accounls aio fixod doposil accounls and aio nainlainod in dosignalod cuiioncios such
as lho US doIIai, lho iilish pound sloiIing, lho Luio and lho }apanoso yon. Inloiosl oainod on lhoso
accounls aio aIso in foioign cuiioncy and lax-fioo.
A ICNR () doposil accounl has lo lo oponod ly lho non iosidonl in foioign cuiioncy oi ly an invaid
ionillanco in foioign cuiioncy oi ly funds iocoivod in iupoos lo lho non iosidonl lanks voslio accounl oi
ly funds lhal aio of a iopaliialIo naluio (poi RI ioguIalions) oi ly liansfoi fion an oxisling NRL/ICNR
() accounl. OnIy Aulhoiisod DoaIois/Aulhoiisod anks aio poinillod lo accopl doposils (A.I. (DIR
Soiios) CiicuIai No.89 dalod ApiiI 24, 2OO4). Hovovoi, aII olhois nay conlinuo lo hoId and ionov
oxisling doposils hoId in lhoii looks in lho nano of NRIs on iopaliialion oi non-iopaliialion lasis, as lho
caso nay lo. Tho inloiosl oainod on such doposils viII conlinuo lo lo oIigilIo foi iopaliialion.

Il cannol lo oponod ly lho non iosidonls IOA hoIdoi in India. Tho accounl oponoi nusl, al lho lino of
oponing lho accounl, undoilako lo infoin lho ank on ioIocaling poinanonlIy lo India. Tho accounl can
lo aIso lo oponod ly lho non iosidonl duiing his visil lo India vilh liavoIois choquos. Tho ank has lho
iosponsiliIily lo salisfy ilsoIf lhal lho accounl is in oidoi and lho accounl oponoi is indood a non iosidonl.
This is noinaIIy ly chocking lho individuaIs passpoil. This accounl can ho hoId joinlIy vilh anolhoi non
iosidonl of Indian oiigin. A joinl doposil accounl vilh a poison iosidonl is nol poinissilIo. A Ioan againsl
lho doposils hoId in lhis accounl is aIso poinissilIo suljocl lo coilain consliainls as lo ils uliIizalion.
Inloiosl
ICNR () doposil accounls viII oain inloiosl, vhich vouId vaiy accoiding lo lho cuiioncy. Inloiosl is
paid in lho sano cuiioncy in vhich lho doposils aio hoId. Inloiosl is ciodilod oilhoi haIf yoaiIy oi
annuaIIy (al lho oplion of lho doposil hoIdoi). IonaIly foi pionaluio vilhdiavaIs is chaigoalIo on
pionaluio loininalion of lho doposils.
Uplo }uIy 17, 2OO3 inloiosl on ICNR () Doposils voio suljocl lo a coiIing of LIOR/SWAI ialos foi lho
coiiosponding naluiilios ninus 25 lasis poinls and voio lo gonoiaIIy confoin lo gIolaI inloiosl ialos in
foioign cuiioncy doposils in US doIIai, pound sloiIing, ouio and olhoi cuiioncios.
MID.C.237/O7.O1.279/2OO3-O4 dalod }uIy 17, 2OO3 nado a chango in lhal inloiosl on fiosh iopaliialIo
NRL doposils foi ono lo lhioo yoais conliaclod offoclivo }uIy 17, 2OO3 shouId nol oxcood 25O lasis poinls
alovo lho LIOR/ SWAI ialos foi US doIIai of coiiosponding naluiily. inloiosl ialos can lo ioundod off
lo lho noaiosl docinaI poinl. A conpulod inloiosl ialo of 3.67 vouId lo 3.75. Tho naluiily of iopaliialIo
NRL doposils vouId conlinuo lo lo ono lo lhioo yoais and lho doposil ialo foi doposils vhoso naluiily
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oxcoods lhioo yoais vouId lo lho sano as lhioo yoai doposils. Tho chango appIiod lo iopaliialIo doposils
ionovod afloi lhoii naluiily poiiod. DOD. No. Dii.C.1/13/.O1.O9/2OO3-O4 dalod }uIy 17, 2OO3 slalos
lhal lho LIOR/ SWAI ialos as on lho Iasl voiking day of lho piocoding nonlh vouId foin lho laso foi
fixod coiIing ialos foi lho inloiosl ialos lhal vouId lo offoiod offoclivo fion lho foIIoving nonlh. Thoso
voio fuilhoi undoiIinod ly lho nasloi ciicuIai issuod on Augusl 14, 2OO3 (DOD No. Dii. C.
11/13.O3.OO/2OO3-O4).
This vas iovisod on Soplonloi 15, 2OO3 ly DOD. No. Dii. C. 25/13.O1.O9/2OO3-O4 vhich slalod lhal
lho inloiosl ialos on fiosh iopaliialIo NRL doposils foi ono lo lhioo yoais conliaclod offoclivo Soplonloi
15, 2OO3 shouId nol oxcood 1OO lasis poinls (as opposod lo 25O lasis poinls oaiIioi) alovo lho LIOR/
SWAI ialos foi lho US doIIai of coiiosponding naluiily.
This vas again anondod on Ocloloi 18, 2OO3 ly DOD No. Dii C.36/13.O1.O9/2OO3-O4 vhich slalod lhal
offoclivo Ocloloi 18, 2OO3, inloiosl ialos on fiosh iopaliialIo non iosidonl doposils shouId nol oxcood 25
lasis poinls alovo lho LIOR/ SWAI ialos foi lho US doIIai of coiiosponding naluiily.
DNS (ID) CC No. 33/O2.O1/2OO3-O4 dalod Ocloloi 3O, 2OO3 ioiloialos lhoso ialos and loins cIaiifying
onco again lhal NRL doposils shouId nol lo lakon foi noio lhan lhioo yoais.
Tiansfoi of funds foi iopaliialion is fioo of inIand oxchango oi connission.
Tho nasloi ciicuIai dalod Augusl 14, 2OO3 ioiloialos lhal :
1. Tho inloiosl on lho doposils aio paid on lho lasis of 36O days lo a yoai. Tho inloiosl shouId lo
caIcuIalod and paid in lho foIIoving nannoi
2. Ioi doposils uplo ono yoai, al lho ialo appIicalIo vilhoul any conpounding offocl.
3 Ioi doposils noio lhan ono yoai, al inloivaIs of 18O days oach and lhoio afloi foi lho ionaining nunloi
of days. Tho doposiloi viII havo lho oplion lo iocoivo lho inloiosl on naluiily vilh lho conpounding
offocl.
Rogaiding doposils accoplod in lho nano of a nonloi oi ioliiod nonloi of lho lanks slaff, oilhoi singIy
oi joinlIy oi lho spouso of a docoasod nonloi oi a docoasod ioliiod nonloi, lho lank can, al ils
disciolion, aIIov addilionaI inloiosl al a ialo nol oxcooding I. This is piovidod lho doposiloi/s aio non
iosidonls/ of Indian nalionaIily oi oiigin and lho doposiloi has givon a docIaialion lhal lho nonoy is
his/hois.
Iionaluio WilhdiavaI
Iionaluio vilhdiavaIs aio poinillod. anks can, al lhoii disciolion, Iovy ponaIlios foi lhis. anks can
aIso Iovy ponaIlios lo iocovoi svap cosls. If lho pionaluio vilhdiavaI lakos pIaco lofoio conpIolion of
slipuIalod poiiod and no inloiosl is payalIo, lanks can (al lhoii disciolion) Iovy ponaIly lo covoi svap
cosls. Tho conpononls of ponaIly nusl lo lioughl lo lho nolico of lho doposiloi. If lhis is nol dono, lho
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lank viII havo lo loai lho oxchango Ioss aiising oul of lho pionaluio vilhdiavaI.. Convoision of
ICNR() lo NRL doposils and vico voisa lofoio naluiily viII alliacl lho ponaI piovisions.
In lho caso of pionaluio vilhdiavaI of NRL loin doposil foi convoision inlo Rosidonl Ioioign Cuiioncy
(RIC) Accounl, lho lank shouId nol Iovy any ponaIly foi pionaluio vilhdiavaI. If such a doposil has
nol iun foi a nininun poiiod of 1 yoai, lho lank nay, al ils disciolion, pay inloiosl al a ialo nol
oxcooding lho ialo payalIo on savings doposils hoId in RIC accounls, piovidod ioquosl foi such a
convoision is nado ly NRL accounl hoIdoi innodialoIy on ioluin lo India. (DOD. Dii. C
9/13.O3.OO/2OO4-O5 dalod }uIy 16, 2OO4)

Ovoiduo Inloiosl
anks nay, al lhoii disciolion ionov an ovoiduo conliacl if lho ovoiduo poiiod fion lho dalo of naluiily
lo lho dalo of ionovaI (lolh days incIusivo) doos nol oxcood 14 days. Tho ialo on lho doposil ionovod
nusl lo lho ialo piovaiIing al lho dalo of naluiily. Whoio ionovaI poiiod oxcoods and if lho doposiloi
pIacos lho onliio anounl oi a poilion as a fiosh ICNR() doposil, lho lanks havo a disciolion lo fix lhoii
ovn inloiosl ialo foi lho ovoiduo poiiod. This ovoiduo inloiosl can lo iocovod if lho doposil is vilhdiavn
lofoio lho conpIolion of lho nininun slipuIalod poiiod.
Tho nain ioason foi nainlaining ICNR () doposil accounls is lo piolocl lho accounl fion dopiocialion
in lho vaIuo of lho iupoo. Thoso aio fiooIy ionillalIo alioad. ICNR () doposil accounls can lo oponod in
lho joinl nanos of lvo oi noio non iosidonls. Thoy can aIso lo oponod joinlIy vilh ninois piovidod lho
ninois aio aIso non iosidonls.
Loans uplo $25O,OOO oi ils oquivaIonl can lo givon lo cIoso ioIalivos vho aio iosidonl fion an ICNR ()
accounl (AI (Dii Soiios) ciicuIai No. 24 dalod Soplonloi 27, 2OO3).
AII ICNR () doposil accounls aio loin doposils and aio hoId ly lanks foi naluiilios lolvoon ono yoai
and 3 yoais. Doposils aio accoplod foi:
(a) Ono yoai and alovo lul Ioss lhan 2 yoais,
(l) 2 yoais and alovo lul Ioss lhan 3 yoais
(c) 3 yoais onIy.
Rocuiiing doposils aio nol accoplod undoi lho ICNR () schono.
Tho piovision appIicalIo lo NRL accounls appIy lo ICNR () doposil accounls aIso. AIso aII dolils and
ciodils poinissilIo undoi NRL accounl schono aio aIso poinissilIo undoi ICNR () doposil accounl. Il
shouId lo nolod lhal:
(i) Tho RI viII nol piovido any oxchango ialo guaianloo lo lanks foi doposils of any
naluiily.
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(ii) Thoso accounls havo lo lo loin doposils.

(iii) ICNR () doposil accounls havo lo lo oponod vilh funds ionillod fion alioad in convoililIo
foioign cuiioncy lhiough noinaI lanks channoIs oi fion iopaliialIo funds oi ly londoiing
liavoIois choquo vhiIo on a visil lo India.
(iv) Tho ionillancos shouId noinaIIy lo iocoivod in lho dosignalod cuiioncy in vhich lho accounl is
lo lo oponod.
(v) Tho naluiily piocoods viII lo payalIo in lho sano cuiioncy. Thoio viII, lhus, lo no foioign
oxchango fIuclualions iisk. Tho nain ioason foi oponing lhoso accounls aio lo piolocl savings
fion dopiocialion in lho vaIuo of lho iupoo. Tho funds can lo iopaliialod alioad fiooIy.
Tiansfoi fion an oxisling NRL accounl lo s ICNR () accounl of lho sano hoIdoi is poinissilIo vilhoul
lho piioi appiovaI of lho RI.
Tho oaid oi a lody appiovod ly lho oaid has lo appiovo lho inloiosl ialos offoiod on doposils of
vaiious naluiilios.
Loans
ankois nay poinil foioign cuiioncy /iupoo Ioans lo doposil hoIdois againsl lhoii ovn doposils (nol
againsl lhiid paily). Tho docunonls shouId lo oxoculod ly lho doposil hoIdois lhonsoIvos and nol ly
lhoii Iovoi of Alloinoy hoIdois. Tho naluiily of lho Ioans shouId nol oxcood lho naluiily of lho doposil
undoi any ciicunslancos. Tho Ioan can lo sanclionod foi puiposos olhoi lhan io-Ionding oi caiiying on
agiicuIluiaI/pIanlalion aclivilios oi foi invoslnonl in ioaI oslalo lusinoss. Tho iopaynonl nusl lo
offoclod in India ly fiosh ionillancos in foioign oxchango oi ly adjuslnonl of lho doposil (AI Dii 55
dalod Novonloi 26, 2OO2).
Whoio a Ioan oi advanco is gianlod againsl an ICNR () doposil, lho lank is fioo lo chaigo a ialo of
inloiosl vilhoul iofoionco lo ils ovn Iiino Ionding Ralo (ILR). A lank can aIso chaigo a ialo Ioss lhan
lhal piosciilod foi advancos uplo Rs. 3 Iakhs vhon gianlod lo a slaff nonloi oi ioliiod slaff
nonloi/spouso oi spouso of docoasod slaff nonloi oi ioliiod nonloi.
Whon a Ioan is gianlod againsl a lhiid paily ICNR () doposil, lho lank can chaigo inloiosl vilhoul
iofoionco lo ILR on a Ioan uplo Rs. 2 Iakhs. If il is alovo Rs. 2 Iakhs lhon il nusl lo al lho ialo piosciilod
ly lho RI.
If lho doposil againsl vhich lho Ioan had loon givon is vilhdiavn lofoio lho slipuIalod poiiod, lho
advanco shouId nol lo lioalod as an advanco againsl a loin doposil and inloiosl shouId lo chaigod as
piosciilod ly lho RI.
Maigin
A lank is poinillod lo doloinino lho naigin
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Inloiosl on lho doalh of a doposiloi

Inloiosl shouId lo paid al lho conliaclod ialo.
If lho doposil is loing cIainod lofoio naluiily, lho lank nusl pay inloiosl al lho appIicalIo ialopiovaiIing
on lho dalo of pIacononl of lho doposil, vilhoul chaiging lho ponaIly.
If lho doalh is lofoio lho naluiily of lho doposil and lho cIain is afloi lho dalo of naluiily, lho lank
shouId pay inloiosl al lho conliaclod ialo liII lho dalo of naluiily. Iion lho dalo of naluiily lho lank
shouId pay sinpIo inloiosl al lho appIicalIo ialo opoialivo on lho dalo of naluiily lo lho dalo of paynonl.
If lho doposiloi dios afloi lho dalo of naluiily, lho inloiosl paid shouId lo al lho savings doposil ialo of
doposils undoi lho Rosidonl Ioioign Cuiioncy Accounl Schono liII lho dalo of paynonl.
Tho lank can agioo lo spIil lho doposil lo lvo oi noio iocoipls in lho nano of cIainanls sopaialoIy. This
viII nol lo pionaluio vilhdiavaI.
If lho cIainanls aio Rosidonls, lho piocoods shouId lo convoilod inlo iupoos
Addilion/ doIolion of nano of joinl accounl hoIdois.
Al lho ioquosl of aII lho joinl hoIdois nanos nay lo doIolod/ addod. Hovovoi, lho anounl oi duialion of
lho oiiginaI doposil shouId nol undoigo a chango in any nannoi and aII lho joinl hoIdois nusl lo Non
Rosidonls of Indian nalionaIily oi oiigin.
NRIs ioluin lo India
Doposils hoId on an NRI / IIOs ioluin lo India foi poinanonl iosidonco can conlinuo liII naluiily al lho
conliaclod ialo. Ioi iosoivo ioquiiononls lhis viII lo considoiod as a iosidonl doposil fion lho dalo of
ioluin of lho doposiloi. Iionaluio vilhdiavaI viII lo suljocl lo lho ponaI piovisions of lho schono. On
naluiily lhoso shouId lo convoilod lo Rosidonl Rupoo Doposils oi RIC (if oIigilIo) al lho accounl hoIdois
oplion.
IonaI piovision on pionaluio convoision can lo vaivod if lho laIanco hoId is pIacod in an RIC accounl.
Wilh iogaid lo inloiosl, il shouId lo paid al lho lino of convoision of ICNR () lo RIC ovon if il has nol
iun foi a nininun naluiily poiiod. Ho ialo nusl nol oxcood lho ialo payalIo on savings lank doposils
hoId undoi lho RIC schono.
Iaynonl of inloiosl on vookonds/ hoIidays
anks shouId pay inloiosl al lho oiiginaIIy conliaclod ialo on lho doposil anounl foi lho hoIiday/
vookond inloivoning lolvoon lho dalo of oxpiiy and lho dalo of paynonl.
Ropaliialion
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Tho Rosoivo ank of India vido ils CiicuIai No. A.I. (DIR Soiios) No.1O1 dalod May 5, 2OO3 has poinillod
iopaliialion of saIo piocoods of iosidonliaI acconnodalion puichasod ly NRIs/IIOs oul of funds iaisod
ly lhon ly vay of Ioans fion a lank lo lho oxlonl of such Ioan/s iopaid ly lhon oul of foioign invaid
ionillanco iocoivod oi ly dolil lo lhoii NRL/ICNR accounls.
On lho NRI ioluining lo India, lho individuaIs ICNR () doposil accounl can lo conlinuod liII naluiily
al lho agiood ialo of inloiosl (if dosiiod). Ioi aII olhoi puiposos lhoso doposils viII lo lioalod as iosidonl
doposils fion lho dalo of ioluin. An accounl hoIdoi aIso has an oplion of convoiling lhoso doposils inlo
an RIC accounl on naluiily on salisfying coilain condilions. If lho doposils aio vilhdiavn lofoio
naluiily, aII diioclions of lho RI incIuding chaiging of ponaI inloiosl viII appIy. Tho RI has poinillod
caidhoIdois lo sollIo chaigos foi lho uso of InloinalionaI Ciodil Caids oul of funds hoId in lho Caid
HoIdois ICNR () Accounl.
Tho Rosoivo lank of India vido A.I. (Dii Soiios) CiicuIai No.21 dalod 23
id
Soplonloi, 2OO3 has cIaiifiod
lhal lho laIancos in lho LLIC and RIC (D) accounls nay lo aIIovod lo lo ciodilod lo NRL/ICNR ()
Accounl, al lho oplion/ioquosl of lho accounl hoIdois consoquonl upon chango in lho iosidonliaI slalus
fion iosidonl lo non-iosidonl.
AI (Dii Soiios) CiicuIai 98 dalod ApiiI 29, 2OO3 slalos lhal lo faciIilalo lolloi hodging oppoilunilios lo
hoIdois of ICNR () doposils, doposil hoIdois can look cioss cuiioncy (nol invoIving lho iupoo) foivaid
conliacls lo convoil lho laIancos in ono cuiioncy lo anolhoi foioign cuiioncy in vhich ICNR () doposils
aio poinillod lo lo nainlainod al lho oplion of lho accounl hoIdoi. Such conliacls onco cancoIIod cannol
lo iolookod.
Iiohililions
No lank shouId:
Accopl oi ionov doposils ovoi lhioo yoais.
Disciininalo in lho nalloi of inloiosl paid on lho doposils lolvoon ono doposil and anolhoi accoplod on
lho sano dalo and foi lho sano naluiily. Ioinission lo offoi vaiying ialos is lasod on lho sizo of doposils
and lhis is suljocl lo condilions such as:
O anks nusl doloinino cuiioncy viso nininun quanlun on vhich diffoionliaI ialos of inloiosl can
lo offoiod.
O Tho diffoionliaI ialo nusl lo vilhin ovoiaII coiIing
O Tho ialos shouId nol lo suljocl lo nogolialion.
O No liokoiago oi connission shouId lo paid on lhoso.
O No poison/ agoncy shouId lo onpIoyod lo coIIocl lhoso doposils on paynonl of connission oi foos.
1) RcsIdcnt FnrcIgn Currcncy Accnunts (RFC)
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A poison of Indian nalionaIily oi oiigin, vho has ioluinod lo India foi poinanonl sollIononl oi poisons
inhoiiling assols alioad fion poisons vho acquiiod such assols vhiIo loing a non iosidonl, can opon a
RIC accounl. aIanco hoId in a RIC accounl is iopaliialIo vilhoul piioi poinission of RI foi a lona fido
puiposo. A RIC accounl is fioo fion aII iosliiclions iogaiding uliIizalion incIuding any iosliiclions on
invoslnonls oulsido India. AIso lho accounl can lo oponod in any foioign cuiioncy olhoi lhan lho
cuiioncy of NopaI oi hulan.
Ioisons vho havo loon iosidonl oulsido India foi a conlinuous poiiod of nol Ioss lhan ono yoai (oxcIusivo
of shoil visils foi poisonaI ioasons) vho ioluin lo India foi poinanonl sollIononl shouId chango lho
slalus of lhoii NRO/NRL Accounl fion non iosidonl lo iosidonl and infoin lho lank of lho chango in
slalus. AIso such poisons havo lo cIoso NRL and ICNR () doposil accounls on naluiily. Tho piocoods
can lo liansfoiiod oilhoi pailIy oi vhoIIy lo an RIC accounl.
Tho nain foaluios aio:
1) Tho accounl is avaiIalIo lo NRIs ioluining fion onpIoynonl alioad.
2) RIC can lo oponod and nainlainod in any foioign cuiioncy.
3) Inloiosl oainod on lho laIanco in lhis accounl is lax-fioo foi 2 yoais fion lho dalo of ioluin lo
India. (vilh offocl fion lho assossnonl yoai 2OO4-2OO5)
4) IiincipaI and inloiosl aio fuIIy iopaliialIo.
Tho accounl can lo hoId joinlIy oi singIy. Noninalion faciIily is aIso avaiIalIo. If lho accounl hoIdoi dios
and lho noninoo is alioad, lho nonios can lo iopaliialod lo hin.
RIC can lo savings oi cuiionl oi loin doposils. Tho loin of lho doposils is lolvoon 3O days lo 6 nonlhs.
Hovovoi choquo faciIily is nol avaiIalIo.
Ciodils lo lhis accounl nay lo ly vay of liansfois, invaid ionillancos and inloiosl on laIanco hoId in
lhis accounl. WilhdiavaIs aio poinillod foi lona fido liansaclions- Tiansfois lo olhoi RIC Accounls and
IocaI disluisononls. An aulhoiizod doaIoi nay gianl a Ioan againsl lho laIancos Iying in lhis accounl
suljocl lo ils connoiciaI judgnonl.
AI (Dii Soiios) CiicuIai No. 6 dalod }uIy 2O, 2OO4 slalos lhal foioign oxchango iocoivod ly a iosidonl
individuaI ly vay of lho piocoods of Iifo insuianco poIicy cIains/ naluiily/ suiiondoi vaIuos sollIod in
foioign cuiioncy fion an insuianco conpany in India poinillod lo undoilako Iifo insuianco lusinoss ly
lho Insuianco RoguIaloiy and DovoIopnonl Aulhoiily nay lo ciodilod lo lho RIC Accounl oi RIC
(Donoslic) Accounl of lho lonoficiaiy.
g) Tcmpnrary FnrcIgn Currcncy Accnunts.
Tho Rosoivo ank of India vido A.I. (DIR Soiios) CiicuIai No. 87 dalod 2O
lh
Maich 2OO3 has poinillod
Oiganizois of inloinalionaI Soninais, Confoioncos, Convonlions olc. lo opon lonpoiaiy foioign oxchango
accounl. Thoso accounls aio opoialod foi lho iocoipl of lho doIogalo foo and paynonl lovaids oxponsos
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incIuding paynonl lo spociaI inviloos alioad. Tho aulhoiizod doaIois can opon such an accounl suljocl lo
lho oiganizois ollaining lho piioi appiovaI fion lho concoinod Adninislialivo Minisliy of Covoinnonl
of India.
Tho faciIily is suljocl lo lho foIIoving condilions:
A. CrcdIts:
AII invaid ionillancos in foioign cuiioncy lovaids iogislialion foos payalIo ly ovoisoas doIogalos,
gianl, sponsoiship foos and donalions, iocoivod fion alioad, in connoclion vilh lho confoionco,
convonlion, olc.
B. Dc-Its:
i) Iaynonl lo foioign/spociaI inviloos allonding lho confoionco, olc., on lho spocific invilalion
of lho oiganizois, lovaids liavoI, holoI chaigos, olc., and honoiaiiun lo foioign guosl
spoakois.
ii) Ronillanco lovaids iofund of iogislialion foos lo foioign doIogalos and unuliIizod
sponsoiship/gianl anounl, if any.
iii) ank chaigos, if any.
iv) Convoision of funds inlo iupoos.
C. AII olhoi ciodils/dolils vouId ioquiio lho piioi appiovaI of lho Rosoivo ank of India.
D. Tho Accounl shouId lo cIosod innodialoIy, afloi lho confoionco/ovonl is ovoi.

Ovcrscas Cnrpnratc BndIcs (OCB)
AI (Dii Soiios ) CiicuIai No. 14 dalod Soplonloi 16, 2OO3 has slalod lhal OCs shaII nol nainlain NRL
Accounls, ICNR () accounls and NRO Doposil accounls vilh aulhoiizod doaIois in India vilh offocl
fion Soplonloi 16, 2OO3. AII oxisling NRL accounls of OCs aio lo lo cIosod and laIancos iopaliialod.
NRL Doposils (Rocuiiing oi fixod), ICNR () accounls and NRO doposils (iocuiiing oi fixod) nay lo
poinillod lo conlinuo liII lho oiiginaI naluiily. Tho naluiily piocoods of NRL doposils and ICNR ()
accounls shouId lo iopaliialod oxpodiliousIy. No nov NRL/ ICNR () / NRO accounls in lho nanos of
OCs aio lo lo oponod noi aio doposils lo lo ionovod.
Cnntractnrs
AI (Dii Soiios) CiicuIai No. 32 dalod Ocloloi 28, 2OO3 aIIovs lho appioving aulhoiily of lho ovoisoas
conliacl i.o. Aulhoiizod DoaIois / LXIM ank/ Woiking gioup lo poinil piojocl / soivico oxpoilois lo
opon, hoId and nainlain foioign cuiioncy accounl in India. LaiIioi piojocl / soivico oxpoilois voio
ioquiiod lo appioach RI foi poinission lo opon such accounls in India.