Foreign Exchange Management Act, 1999 determines the laws
regulating foreign exchange and enlists the various deposit
schemes available to Non-Resident Indians
The types of
deposit schemes made available to NRIs are:
- FCNR (B) -
Foreign Currency (Non-Resident) Account (Banks) Scheme
- NRE Account -
Non - Resident (External) Rupee Account;
- NRO Account -
Non-Resident Ordinary Rupee Account Scheme. All NRIs can
open such accounts, with the exception of individuals
residing in Pakistan and Bangladesh, who require permission
from the RBI. Joint accounts of two or more non-residents
and nomination facility are permitted.
the FCNR (B) is a term deposit only, the NRE and NRO accounts
can be operated as a savings, current, recurring or fixed
for interest rates, FCNR (B) and NRE are subject to a cap, and
should not exceed the LIBOR/SWAP rates. In the case of NRO
accounts, rates are determined by the banks. The interest
rates, currently at 3.5% apply to a period of 1 to 3
accounts at dealers (banks) authorized by the RBI accept
currencies in Pound Sterling, US Dollars, Euros and Japanese
yen, and except for the NRO account, can be fully repatriated.
From the NRO account, only the current income up to a maximum
of USD 1 million per calendar year is allowed.
Indian Government's aggressive strategy to channelise funds
from NRIs has resulted in a 7-8 % increase in NRI deposits and
the latest move by the central bank to hike the repo rate by
25 basis points will not restrain overseas Indians from
remitting money to India.