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Full Convertibility of Deposit Schemes � Non-Resident Indians
A.P. (DIR Series) Circular No. 28 dated
4th March 2002
Attention of authorised dealers is
invited to "Foreign Exchange Management (Deposit) Regulations, 2000"
notified under Notification No. FEMA 5/ 2000-RB dated May 3, 2000. In terms of
sub-regulations 1(iv) and (v) of Regulation 5, authorised dealers/ authorised
banks are permitted to accept deposits from persons resident outside India under
the Non-Resident (Non-Repatriable) Rupee Account Scheme, (NRNR account), and the
Non-Resident (Special) Rupee Account Scheme, (NRSR account), specified in
Schedules 4 and 5 respectively to the above Notification.
2. With a view to
providing full convertibility of deposit schemes for non-resident Indians and
rationalising the existing non-resident deposit schemes, it has been decided to
discontinue NRNR account and NRSR account schemes with effect from April 1,
2002. Accordingly, with effect from April 1, 2002: -
a. Authorised
dealers/ authorised banks shall not accept any fresh deposits or open any fresh
account, by way of renewal or otherwise, under the above two schemes.
b. The existing
accounts under NRNR account scheme may be continued only upto the date of
maturity. The maturity proceeds of the deposits under NRNR Account Scheme shall
be credited to the accountholder�s Non-Resident (External) Rupee Account (NRE
account), after giving notice to the accountholder. For this purpose, the
authorised dealers and authorised banks may give a notice to the accountholder
that the maturity proceeds shall be credited to his NRE accounts. The
accountholders may choose to credit the maturity proceeds to his NRE saving bank
account or current account or open a fresh NRE term deposit account. The
authorised dealers or authorised banks may also permit the accountholder, on his
request, to credit the maturity proceeds to his NRO account. In case no reply is
received from the accountholder, the maturity proceeds of deposits under NRNR
account Scheme may be credited to his NRE account.
c. The existing term
deposits under the NRSR account scheme may be continued till the maturity and
the maturity proceeds shall be credited to the Non-Resident (Ordinary) Rupee
Account (NRO account) of the accountholder.
d. The existing NRSR
account, other than term deposit, shall not be continued after September 30,
2002, and may, at the option of the accountholder, be closed or balance thereof
be credited to his NRO account on or before that date. For this purpose, a
notice to the accountholders may be given and in case no reply is received the
said NRSR account may be closed and the balance transferred to the NRO account
of the accountholder.
3. While the
facilities currently available to the account holders for premature withdrawal
continue, in the event of premature closure of the term deposits, under both the
schemes, the option of reinvesting the proceeds will, however, be restricted to
the NRO account of the accountholder.
4. A copy of
Notification No. FEMA 52/ RB-2002 dated March 1, 2002, amending the Foreign
Exchange Management (Deposits) Regulations, 2000, is enclosed.
5. Authorised
dealers/ authorised banks may bring the contents of this circular to the notice
of their constituents concerned.
6. The directions
contained in this circular have been issued under Section 10(4) and Section
11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999).
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