1. NRIs/PIOs are eligible to open and maintain these accounts with an authorized dealer.
2. These accounts may be opened with funds remitted from outside India through normal banking channels or funds received in rupees by debit to the account of a non-resident bank maintained with an authorized dealer in India or funds which are repatriable nature in terms of the regulations made by Reserve Bank Accounts may also be opened by transfer of funds from existing NRE/FRNR accounts.
3. Remittances from outside India for opening of or crediting to these accounts should be made in the designated currency in which the account is desired to be opened/ maintained. Without prejudice to this, if the remittance is received in a currency other than the designated currency (including funds received in rupees by debit to the account of a non-resident bank), it should be converted into the latter currency by the authorized dealer at the risk and costs of the remitter and account should be opened/ credited in only the designated currency.
4. In case the depositor with any convertible currency other than designated currency desires to place to deposit in these accounts, authorized dealers may undertake with the depositor with fully covered swap in that currency against the desired designated currency. Such a swap may also be done between two designated currencies.

Opening of accounts in the names of individuals/ entities of Bangladesh/Pakistan nationality/ ownership.

Opening of FCNR (B) accounts in the names of individuals/ entities of Bangladesh/ Pakistan nationality/ ownership requires approval of Reserve Bank.

Opening Foreign Currency (Non-Resident) Account (Banks) Scheme [FCNR(B)] account in any freely convertible currency.

Deposits of funds in the accounts may be accepted in any permitted foreign currency. It may be noted that 'Permitted currency' for this purpose would mean a foreign currency which is freely convertible as defined in terms of Regulation 2(v) of FEMA 14/2000-RB dated May 3, 2000, as amended from time to time.

Type of account

These accounts may be opened only in the form of term deposit up to maturity of five years.

Interest rate on FCNR (B) Deposits

In respect of FCNR (B) deposits of all maturities contracted effective from the close of business is India on November 23, 2011, interest shall be paid within the ceiling rate of LIBOR/SWAP rates plus 125 basis points for the respective currency/ corresponding maturities. On floating rate deposits, interest shall be paid within the ceiling of SWAP rates for the respective currency/ maturity plus 100 basis points. For floating rate deposits, the interest reset period shall be six months.

Permissible Debits/ Credits

All debits/ credits permissible in respect of NRE accounts shall be permissible in respect of these accounts also.

Credit of balances in EEFC/RFC(D) Account on account of change of status

Reserve Bank has clarified that the balances in the EEFC and RFC (D) Accounts may be allowed to be credited to FCNR(B) account, at the option/ request of the account holders consequent upon change of their residential status from resident to non-resident.

Rate of Conversion of Rupees into Designated Currencies and vice versa

Remittances received in Indian rupees for opening these accounts shall be converted by the authorized dealer into the designated foreign currency at the clean T.T. selling rate for that currency ruling on the date of conversion.

For the purpose of payment in rupees, funds held in these accounts shall be converted into rupees at the authorized dealer's clean T.T. buying rate for the concerned currency ruling on the date of withdrawal.

Inland Movement of Funds.

Any inland movement of funds for the purpose of opening these accounts as well as for repatriation outside India of balances held in these accounts will be free of inland exchange or commission for the non-resident depositors. The Authorized dealer receiving foreign currency remittances in these accounts will also, on request, pass on the foreign currency to another authorized dealer if the account has to be opened with the latter, at no extra cost to the remitter.

Manner of payment of interest

1. The interest on the deposits accepted under the scheme should be paid on the basis of 360 days to a year.
2. The interest on FCNR (B) deposits should be calculated and paid at intervals of 180 days each and thereafter for the remaining actual number of days. However, the depositor will have the option to receive the interest on maturity with compounding effect.

Loans/overdrafts against security of funds held in the account.

The terms and conditions as applicable to NRE deposits in respect of loans and overdrafts in India to depositor and to third parties as also loans outside India against security of deposits, shall apply mutatis mmutandis to FCNR(B) deposits. The margin requirement shall be notionally calculated on the rupee equivalent of the deposits.

Change of resident status of the account holder

When an account holder becomes a person resident India, deposit may be allowed to continue till maturity at the contracted rate of interest, if so desired by account holder. However, the provisions relating to rate of interest and reserve requirements as applicable to FCNR (B) deposits, for all other purposes such deposits shall be treated as resident deposits from the date of return of the account holder to India. Authorized should convert the FCNR (B) deposits on maturity into resident rupee deposits accounts or RFC account (if the deposit is eligible to open RFC account), at the option of the account holder and interest on the deposit (rupee account or RFC account) shall be payable at the relevant rtes applicable for such deposits.