[nilesh]

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Can you tell me about the interest rates for Foreign Currency Non-Resident (Banks) Accounts - "FCNR" in PNB (Punjab National Bank)?

[Vishal Kotkar]

Non-Resident Indians can open Foreign Currency Non-Resident (Banks) Accounts - "FCNR" under PNB (Punjab National Bank) Global Foreign Currency Deposit Scheme.

The account should be opened by the non-resident account holder himself and not by the holder of power of attorney in India.

These deposits can be maintained in 5 designated currencies i.e. U.S. Dollar (USD), Pound Sterling (GBP) and Euro, Australian Dollar (AUD) & Canadian Dollar (CAD).

These accounts can only be maintained in the form of terms deposits for maturities of minimum 1 year to maximum 5 years.

Advantages of FCNR (B) Deposits

• Principal along with interest freely reparable in the currency of choice.

• No Exchange Risk as the deposit is maintained in foreign currency.

• Loans/overdrafts in rupees can be availed by NRI depositors or 3rd parties against the security of these deposits. However, loans in foreign currency against FCNR (B) deposits in India can be availed outside India through our correspondent Banks.

• No Wealth Tax & Income Tax is applicable on these deposits.

• Gifts made to close resident relatives are free from Gift Tax.

• Facility for automatic renewal of deposits on maturity and safe custody of Deposit Receipt is also available.

Payment of Interest

Interest on FCNR (B) deposits is being paid on the basis of 360 days to a year.

However, depositor is eligible to earn interest applicable for a period of one year if the deposit has completed a period of 365 days.

For deposits up to one year, interest at the applicable rate will be paid without any compounding effect.

In respect of deposits for more than one year, interest can be paid at intervals of 180 days each and thereafter for remaining actual number of days.

However, depositor will have the option to receive the interest on maturity with compounding effect in case of deposits of over one year.