Chapter No. Page No. 14 274 International Finance NON-RESIDENT (EXTERNAL), EEFC AND FCNR (BANKS) ACCOUNTS NON-RESIDENT (EXTERNAL) ACCOUNT AN ACCOUNT IN RUPEES OPENED AND MAINTAINED WITH AN AUTHORIZED DEALER OR o o A CO-OPERATIVE BANK OR ANY OTHER BANK OR o PUBLIC FINANCIAL INSTITUTION SPECIALLY AUTHORIZED OR EXEMPTED OR PERMITTED BY THE RESERVE BANK UNDER THE ACT IN THE NAME OF A PERSON RESIDENT OUTSIDE INDIA IN PURSUANCE OF THE NON-RESIDENT (EXTERNAL) ACCOUNTS RULES, 1970, IS DESIGNATED AS A NON-RESIDENT (EXTERNAL) OR NRE ACCOUNT.
Chapter No. Page No. 14 274 International Finance NON-RESIDENT (EXTERNAL), EEFC AND FCNR (BANKS) ACCOUNTS OPENING OF ACCOUNT A NON-RESIDENT (EXTERNAL) ACCOUNT MAY BE OPENED o IN THE NAME OF A PERSON OF INDIAN NATIONALITY OR ORIGIN, RESIDENT OUTSIDE INDIA AND o OVERSEAS CORPORATE BODIES (OCBS) PROVIDED THAT THE FUNDS ARE TRANSFERRED TO INDIA IN A FREELY CONVERTIBLE CURRENCY. AN NRE ACCOUNT MAY ALSO BE OPENED: IN THE NAME OF AN ELIGIBLE NRI DURING HIS VISIT WITH o THE PROCEEDS OF FOREIGN CURRENCY, DRAFTS AND TRAVELER'S CHEQUES DRAWN IN THE NAME OF APPLICANT OR FOREIGN CURRENCY NOTES TENDERED BY HIM SUBJECT TO HIS ENDORSEMENT. CONT….
Chapter No. Page No. 14 274 International Finance NON-RESIDENT (EXTERNAL), EEFC AND FCNR (BANKS) ACCOUNTS OPENING OF ACCOUNT o BY CONVERTING AN EXISTING ORDINARY NON-RESIDENT OR FCNR (B) ACCOUNT OR BY TRANSFER OF FUNDS FROM SUCH AN ACCOUNT WITH PRIOR APPROVAL OF THE RESERVE BANK. IN THE NAME OF AN OVERSEAS FIRM, COMPANY, SOCIETY o OR ANY OTHER CORPORATE BODY OF WHICH AT LEAST 60 PERCENT IS OWNED BY NON-RESIDENTS OF INDIAN NATIONALITY, OR IN THE NAME OF AN OVERSEAS TRUST IN WHICH AT LEAST 60 PERCENT OF THE BENEFICIAL INTEREST IS IRREVOCABLE HELD BY SUCH PERSONS.
Chapter No. Page No. 14 276 International Finance NON-RESIDENT (EXTERNAL), EEFC AND FCNR (BANKS) ACCOUNTS OPERATION BY RESIDENTS o UNDER A POWER OF ATTORNEY NON-RESIDENT ACCOUNT (EXTERNAL) BY A RESIDENT MAY BE ALLOWED WITH PRIOR APPROVAL OF RESERVE BANK AND IS RESTRICTED TO WITHDRAWALS FOR LOCAL PURPOSES. IF THE ACCOUNT HOLDER OR A BANK DESIGNATED BY HIM o HAS BEEN GRANTED PERMISSION BY THE RESERVE BANK TO MAKE INVESTMENTS IN INDIA, THE ATTORNEY HOLDER MAY BE PERMITTED BY THE AUTHORIZED DEALER FOR SUCH INVESTMENT, BUT NOT FOR REPATRIATION OUTSIDE INDIA.
Chapter No. Page No. 14 276 International Finance NON-RESIDENT (EXTERNAL), EEFC AND FCNR (BANKS) ACCOUNTS TRANSACTIONS WHICH ARE FREELY ALLOWED DEBITS: o DEBITS TO LOCAL DISBURSEMENTS, EXCEPTING THE PURPOSE FOR INVESTMENT IN INDIA. DEBITS FOR PAYMENT OF PREMIUMS ON LIC POLICIES o HELD BY THE ACCOUNT HOLDER OR HIS DEPENDENTS. DEBITS BY WAY OF TRANSFER OF FUNDS TO ANOTHER o NRE ACCOUNT OF THE ACCOUNT HOLDER. o DEBITS BY WAY OF TRANSFER TO NRE ACCOUNTS OF OTHER PERSONS FOR BONAFIDE PURPOSES. o DEBITS UNDER GENERAL OR SPECIAL PERMISSION GRANTED BY RESERVE BANK.
Chapter No. Page No. 14 277 International Finance NON-RESIDENT (EXTERNAL), EEFC AND FCNR (BANKS) ACCOUNTS TRANSACTIONS WHICH ARE FREELY ALLOWED CREDITS: o CREDIT BY WAY OF TRANSFER FROM ANY NON-RESIDENT (EXTERNAL) ACCOUNT OF THE ACCOUNT HOLDER. CREDITS REPRESENTING INTEREST ON BALANCES OF o NON-RESIDENT (EXTERNAL) ACCOUNT OF THE ACCOUNT HOLDER. o CREDITS REPRESENTING REFUND OF SUBSCRIPTIONS BY AN INDIAN COMPANY TO WHICH THE AMOUNT WAS REMITTED TO THE DEBIT OF THE AMOUNT TO PURCHASE ITS NEW ISSUE OF SHARES.
Chapter No. Page No. 14 278 International Finance NON-RESIDENT (EXTERNAL), EEFC AND FCNR (BANKS) ACCOUNTS RATE OF INTEREST ON PREMATURE WITHDRAWAL RATE OF INTEREST ON NRE DEPOSIT WILL BE AS NOTIFIED o BY THE CONCERNED BANK FROM TIME TO TIME. o PREMATURE WITHDRAWAL OF A DEPOSIT NON-RESIDENT (EXTERNAL) ACCOUNT IS PERMISSIBLE SUBJECT TO PENALTY AS DECIDED BY THE BANK. FOREIGN EXCHANGE SOLD TO THE ACCOUNT HOLDER OR o HIS FAMILY TO THE DEBIT OF HIS NON-RESIDENT (EXTERNAL) ACCOUNTS SHOULD BE ENDORSED ON HIS PASSPORT. o INTEREST ON NRE w.e.f. 1-11-2004 SHOULD NOT EXCEED LIBOR /SWAP RATES OF PREVIOUS MONTH PLUS 50 BASIS POINTS.
Chapter No. Page No. 14 279 International Finance NON-RESIDENT (EXTERNAL), EEFC AND FCNR (BANKS) ACCOUNTS LOAN / OVERDRAFT o TEMPORARY OVER DRAWINGS IN NRE (SB) ACCOUNT: TEMPORARY OVERDRAWING NOT EXCEEDING MORE THAN 2 WEEKS UP TO A LIMIT OF RS. 54,000 MAY BE ALLOWED. NON-TEMPORARY LOAN/OVERDRAFT: A LOAN OR o OVERDRAFT MAY BE GRANTED UNDER NORMAL INTEREST RATES FOR PURPOSES OTHER THAN INVESTMENT IN INDIA, PROVIDED IT IS FULLY COVERED BY FIXED DEPOSIT. o IN INDIA FOR THE PURPOSE OF INVESTMENT: AN AUTHORIZED DEALER MAY GRANT A LOAN OR OVERDRAFT FOR THE PURPOSE OF MAKING DIRECT INVESTMENT IN INDIA ON NON –REPATRIATION BASIS BY WAY OF CONTRIBUTION TO THE CAPITAL ON INDIAN FIRMS / COMPANIES, HOSPITALS, HOTELS OF 3 STAR OR HIGHER GRADES, SHIPPING, etc. CONT….
Chapter No. Page No. 14 280 International Finance NON-RESIDENT (EXTERNAL), EEFC AND FCNR (BANKS) ACCOUNTS LOAN / OVERDRAFT o FOR PURCHASE OF HOUSE OR FLAT: A LOAN OR OVERDRAFT MAY BE GRANTED TO A NON-RESIDENT INDIVIDUAL OF INDIAN NATIONALITY OR A FOREIGN CITIZEN OF INDIAN ORIGIN (NOT AN OCB) AGAINST HIS NRE DEPOSITS. o LOAN / OVERDRAFT TO RESIDENT AGAINST NRE DEPOSIT: A LOAN OR AN OVERDRAFT MAY BE GRANTED TO A RESIDENT INDIVIDUAL / FIRM / COMPANY AGAINST NRE DEPOSITS PROVIDED: THE LOAN IS UTILIZED FOR PERSONAL PURPOSES OR • FOR CARRYING ON BUSINESS OTHER THAN AGRICULTURE / PLANTATION. • AN IRREVOCABLE UNDERTAKING NOT TO WITHDRAW THE DEPOSIT DURING THE PERIOD OF THE LOAN.
Chapter No. Page No. 14 281 International Finance NON-RESIDENT (EXTERNAL), EEFC AND FCNR (BANKS) ACCOUNTS TRANSFER FROM ONE ACCOUNT TO ANOTHER AN NRE ACCOUNT MAY BE TRANSFERRED FROM: o ONE BRANCH TO ANOTHER BRANCH OF THE SAME AUTHORIZED DEALER. o FROM ONE AUTHORIZED DEALER TO ANOTHER AUTHORIZED DEALER AT THE SAME CENTRE OR AT ANOTHER CENTRE.
Chapter No. Page No. 14 282 International Finance NON-RESIDENT (EXTERNAL), EEFC AND FCNR (BANKS) ACCOUNTS EXCHANGE EARNERS’ FOREIGN CURRENCY (EEFC) ACCOUNTS. EXCHANGE EARNERS’ FOREIGN CURRENCY (EEFC) o ACCOUNT IS A CURRENT ACCOUNT IN A CONVERTIBLE FOREIGN CURRENCY o MAINTAINED WITH AN AUTHORIZED DEALER IN INDIA o BY AN EXPORTER OF GOODS AND SERVICES OR BY ANY o OTHER BENEFICIARY OF o INWARD REMITTANCES IN ANY CONVERTIBLE FOREIGN CURRENCY o AND IS MAINTAINED BY RESIDENTS IN INDIA.
Chapter No. Page No. 14 282 International Finance NON-RESIDENT (EXTERNAL), EEFC AND FCNR (BANKS) ACCOUNTS EXCHANGE EARNERS’ FOREIGN CURRENCY (EEFC) ACCOUNTS. NON-ELIGIBILITY / RESTRICTIONS I. AN EXPORTER MAINTAINING A FOREIGN CURRENCY ACCOUNT WITH A BANK OUTSIDE INDIA IS NOT ELIGIBLE TO MAINTAIN AN EEFC ACCOUNT IN INDIA. II. A SAVINGS BANK EEFC ACCOUNT IN THE NAME OF A FIRM, COMPANY OR ANY OTHER CORPORATE BODY IS NOT PERMISSIBLE. III. CHEQUE BOOK FACILITY IS NOT AVAILABLE. IV. RECIPIENTS OF FOREIGN INWARD REMITTANCES ARE ALLOWED TO RETAIN 50% OF THE AMOUNT IN A FOREIGN CURRENCY DENOMINATED ACCOUNT TO BE OPENED WITH AN AD IN INDIA.
Chapter No. Page No. 14 283 International Finance NON-RESIDENT (EXTERNAL), EEFC AND FCNR (BANKS) ACCOUNTS UTILIZATION OF FUNDS IN EEFC ACCOUNTS I. PAYMENTS OUTSIDE INDIA TOWARDS A CURRENT ACCOUNT TRANSACTION IN ACCORDANCE WITH THE PROVISIONS OF: II. THE FOREIGN EXCHANGE MANAGEMENT (CURRENT ACCOUNT TRANSACTION) RULES 2000 AND III. TOWARDS A CAPITAL ACCOUNT TRANSACTION PERMISSIBLE UNDER THE FOREIGN EXCHANGE MANAGEMENT (PERMISSIBLE CAPITAL ACCOUNT TRANSACTION) REGULATIONS 2000. IV. PAYMENT OF CUSTOMS –DUTY AS PER FOREIGN TRADE POLICY OF THE GOVERNMENT. CONT….
Chapter No. Page No. 14 283 International Finance NON-RESIDENT (EXTERNAL), EEFC AND FCNR (BANKS) ACCOUNTS UTILIZATION OF FUNDS IN EEFC ACCOUNTS V. PAYMENT IN FOREIGN CURRENCY TO A PERSON RESIDENT IN INDIA FOR SUPPLY OF GOODS /SERVICES INCLUDING PAYMENTS FOR AIR FARE AND HOTEL ACCOMMODATION. VI. TRADE RELATED LOANS /ADVANCES WITHOUT CEILING BY AN EXPORTER TO HIS IMPORTER OUTSIDE INDIA, SUBJECT TO (BORROWING AND LENDING IN FOREIGN EXCHANGE ) REGULATION 2000. IF THE AMOUNT EXCEEDS US $ 100,000 A GUARANTEE OF A BANK OF INTERNATIONAL REPUTE SITUATED OUTSIDE INDIA IS TO BE PROVIDED.
Chapter No. Page No. 14 283 International Finance NON-RESIDENT (EXTERNAL), EEFC AND FCNR (BANKS) ACCOUNTS OTHER MISCELLANEOUS PROVISIONS NO RESTRICTIONS ON WITHDRAWAL IN RUPEES FROM o EEFC ACCOUNT, WITHDRAWAL SHALL NOT BE ELIGIBLE FOR CONVERSION INTO FOREIGN CURRENCY AND CREDIT TO THE ACCOUNT. RE-CREDIT OF UNUTILIZED FOREIGN CURRENCY IS o PERMISSIBLE. THE BALANCE MAY BE ALLOWED TO BE CREDITED TO o NRE / FCNR-B ACCOUNT AT THE OPTION / REQUEST OF THE ACCOUNT HOLDERS CONSEQUENT TO CHANGE THEIR STATUS FROM RESIDENT TO NON-RESIDENT. RECEIPTS OF DISINVESTMENT PROCEEDS UNDER ADRs / o GDRs, SCHEME APPROVED BY FIBB ARE PERMITTED TO BE CREDITED TO THEIR EEFC ACCOUNTS.
Chapter No. Page No. 14 284 International Finance NON-RESIDENT (EXTERNAL), EEFC AND FCNR (BANKS) ACCOUNTS FOREIGN CURRENCY (NON-RESIDENT) ACCOUNTS (BANKS) o AN ACCOUNT UNDER THE FOREIGN CURRENCY (NON-RESIDENT) ACCOUNTS (BANKS) SCHEME MAY BE OPENED WITH AN AUTHORIZED DEALER IN INDIA ONLY IN THE FORM OF A TERM DEPOSIT BY AN NRI / OCB WITH FUNDS REMITTED FROM ABROAD OR FUNDS TRANSFERRED FROM AN EXISTING NRE / FCNR ACCOUNT OF THE APPLICANT.
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