Please refer to our circular RPCD.RRB.No.BC.89/03.05.33(C)/99-2000
dated April 28, 2000 on authorisation to RRBs to open and maintain non-resident
accounts in rupees.
2. As announced
in the Union Budget for 2007-08, it has been decided to permit RRBs to accept
FCNR (B) deposits. In this context, the eligibility criteria prescribed for authorisation
to open / maintain Non-Resident (Ordinary / External) accounts in rupees have
also been reviewed. Accordingly, in supersession of the instructions contained
in our aforesaid circular, the following criteria shall be applicable for opening/maintaining
Non-Residents (Ordinary / External) accounts in rupees and for acceptance of FCNR
(B) deposits by RRBs:
i. The bank
should have a positive net-worth;
ii. The bank should
not have defaulted in maintenance of CRR/SLR requirements on more than three occasions
during the preceding two years;
iii. The bank should
have earned net profit during the preceding year;
iv.
Net NPA level of the bank should not exceed five per cent of the outstanding advances
as on March 31 of the preceding year;
v. The bank should
adhere to the 'Know Your Customer (KYC)' / 'Anti- Money Laundering (AML)' norms,
as may be prescribed from time to time;
vi. The bank
should possess requisite skills and capabilities to deliver such services;
vii.
While the FCNR deposit receipts would be issued by RRBs to the depositors concerned,
the foreign currency funds received as deposits could be either placed by the
RRBs as deposits matching foreign currency deposits with their sponsor banks or
swapped with the sponsor bank into rupees. In both cases, the RRB should not
carry any foreign currency or maturity mismatch risk in their books. The operational
and accounting details etc. may be decided by mutual agreement between the RRBs
and the sponsor banks;
viii. The RRB will maintain
CRR/SLR on rupee equivalent of such deposits in accordance with the instructions
issued by the Reserve Bank from time to time;
ix. For
acceptance of FCNR (B) deposits, the RRB should enter into a tie-up arrangement
with its sponsor bank regarding the modalities for maintenance/operation of accounts,
placement of deposits with sponsor banks, management of currency and other attendant
risks, etc., subject to the guidelines issued by our Foreign Exchange Department
(FED) in this regard;
x. The sponsor bank should undertake
to provide necessary guidance to the RRB in compliance with various directives/guidelines
that might be issued by Reserve Bank of India; and
xi.
The bank should have furnished satisfactory compliance on the serious irregularities
pointed out in the latest inspection report of NABARD.
3. Maintenance of and operations on the NRO/NRE/FCNR(B) accounts shall be governed
by regulations/directives issued by Reserve Bank of India from time to time.
4. RRBs, desirous of opening such accounts, may submit their applications, along
with necessary details, to our concerned Regional Offices of Foreign Exchange
Department for grant of necessary authorisation in this regard.
5.Please acknowledge receipt to our respective Regional Office.
Yours
faithfully,
(G. Srinivasan)
Chief
General Manager