PREMATURE CLOSURE OF NRI TERM DEPOSITS

FCNR (B)

· No interest is payable if the deposit is closed before 1 year.

· In other cases, interest rate as on the date of deposit or on the date of closure, applicable for the period run, whichever is less, minus 1% is payable. If the Net interest rate after deduction of penalty from applicable rate is in "negative" NO INTEREST SHALL BE Payable. However, if the deposit is closed before maturity for the purpose of renewal, to avail the benefit of increase in the rate of interest, for a period more than unexpired period of deposit and renewed under the same scheme and same currency, no penal interest is charged.

NRE

· No interest is payable if the account is closed before 1 year.

· In other cases, interest rate as on the date of deposit or on the date of closure, applicable for the period run, whichever is less is payable. In no case rate of interest payable on such deposit to exceed the contracted rate.

PAYMENT OF INTEREST

• Payment of interest is permissible in foreign currency on FCNR deposits and in Indian Rupees on NRE Deposits. On FCNR deposits payment of interest will be in the currency of the deposits. If needed, conversion of interest on NRE/FCNR in to other currencies is permitted at the ruling exchange rate.
• On NRE deposits, interest is paid quarterly and on FCNR deposits half-yearly. Interest can also be paid monthly on discounted basis on deposits for 12 months and above on specific request.

ADDITION / DELETION OF NAMES IN ACCOUNT

• Addition of names to the account is permitted subject to their otherwise qualifying to open joint NRE or FCNR accounts and the deposit does not undergo any change in its other terms as originally fixed.
• Deletion of names is permitted provided all the depositors agree in writing and at least one of the depositors name is continued.

RENEWAL

NRE / FCNR not renewed on the date of maturity can be subsequently renewed within 14 days from the date of maturity of the deposit. The rate of interest applicable for renewed FCNR / NRE deposit is either the rate prevailing on the date of maturity or on the date of actual renewal, whichever is less.

Automatic renewal facility is also available. This facility can be made use of by suitable indication in the application at the time of opening the account. Under such renewal facility deposit will be renewed on the same original terms and conditions. On such automatic renewal the rate of interest for the renewed period shall be the rate prevailing on the maturity date of the deposit.

CHANGE OF RESIDENTIAL STATUS

From resident to non-resident: The existing account will be designated as a Non Resident (Ordinary) account.

From non-resident to resident:

• NRO account shall be re-designated as resident rupee accounts.
• NRE accounts shall be re-designated as resident accounts or the funds held in these accounts may be transferred to the RFC account (if the account holder is eligible for it) at the option of the account holder immediately upon the change of status.
• FCNR (B) deposits may be continued at the contracted rate till maturity if desired by the depositor (s). Such deposits shall however be treated as resident deposits from the date of return of account holder to India. On maturity it will be converted in to resident rupee deposit account or RFC account (if the depositor is eligible to open RFC account), at the option of the account holder and interest on the new deposit (rupee account or RFC account) shall be payable at the relevant rates applicable for such deposits.

OPERATIONS BY POWER OF ATTORNEY HOLDER

Operations in an NRE account in terms of Power of Attorney granted in favour of a resident by a non-resident account holder is allowed provided such operations are restricted to withdrawal for local payments or remittance to the account holder himself through normal banking channels. In cases where the account holder or a bank designated by him is eligible to make investments in India, the Power of Attorney holder may be permitted to operate the account to facilitate such investment. The resident Power of Attorney holder shall not, however, be allowed to repatriate outside India funds held in the account under any circumstances other than to the account holder himself, nor to make payment by way of gift to a resident on behalf of the account holder or to transfer funds from the account to another NRE account.

In case of FCNR account, terms and conditions as applicable to NRE account will apply.

Operations in an NRO account in terms of Power of Attorney granted in favour of a resident Indian by a non-resident account holder is allowed, provided such operations are restricted to (1) all local payments in Rupees including payments for eligible investments subject to compliance with relevant regulations made by the Reserve Bank; and (2) remittance outside India of current income in India of the non-resident individual account holder, net of applicable taxes.
The resident Power of Attorney holder is neither permitted to repatriate outside India funds held in the account other than to the account holder nor to make payment by way of gift to a resident on behalf of the non-resident account holder or transfer funds from the account to another NRO account.

FORWARD COVER
An NRI / PIO can enter into forward contract through an authorized dealer branch to hedge the balances held in NRE / FCNR (B) accounts with rupee as one of the currency.

FOR DEPOSITS MATURING ON HOLIDAYS

In respect of term deposit maturing for payment on a Saturday / Sunday or a non business working day; bank shall pay interest at the originally contracted rate on the deposit amount for Saturday / Sunday or a holiday or a non-business working day intervening between the date of expiry of the specified term of the deposit and the date of payment of the proceeds of the deposit on the succeeding working day.

INTEREST PAYABLE ON THE DEPOSIT OF A DECEASED DEPOSITOR

In the case of a term deposit standing in the name/s of-

(a) A deceased individual depositor, or
(b) Two or more joint depositors, where one of the depositors has died, interest should be paid in the manner indicated below:

(1) At the contracted rate on the maturity of the deposit.

(2) In the event of the payment of the deposit being claimed before the maturity date, the bank will pay interest at an applicable rate prevailing on the date of placement of the deposit, for the period for which the deposit has run without charging the penalty.

(3) In the event of death of the depositor before the date of the maturity of the deposit and the amount of the deposit is claimed after the date of maturity, the bank will pay interest at the contracted rate till the date of maturity. From the date of maturity to the date of payment, the bank should pay simple interest at the applicable rate operative on the date of maturity, for the period for which the deposit remained with the bank beyond the date of maturity.

(4) In the case of the death of the depositor after the date of maturity of the deposit, the bank should pay interest at a rate operative on the date of maturity in respect of savings deposit held under RFC Account Scheme, from the date of maturity till the date of payment.

(5) If on request from the claimant/s, the bank agrees to split the amount of term deposits and issues two or more receipts individually in the name/s of the claimant/s, it should not be construed as premature withdrawal of the term deposit for the purpose of levy of penalty provided the period and aggregate amount of the deposit do not undergo any change.