|
DBOD.No. Dir.BC.7/13.01.09/98 January 20, 1998 All Commercial Banks Dear Sir, Conversion of FCNR(B)
Accounts of the Returning Indians into RFC Accounts/Resident Rupee Accounts -
Payment of interest Please refer to our Circular DBOD.No.BC.68/13.01.09/93
dated 20 January 1993 advising exemption from levy of Penalty for premature
withdrawal of FCNR/NRE Deposits for the purpose of conversion to Resident
Foreign Currency Accounts (RFC) and Circular DBOD.No.Dir.BC. 162/13.01.09/96
dated 24 December 1996 permitting banks to pay interest on prematurely
withdrawn FCNR (A) Deposits before completion of minimum stipulated period
for conversion into RFC Account. 2. A number of banks have
recently approached us to permit them to pay interest in case of conversion
of FCNR (B) Deposit into RFC/Resident Rupee Account before completion of
minimum stipulated period of 6 months. It has since been decided to allow
banks to pay interest at their discretion at the time of conversion of FCNR
Account into RFC/Resident Rupee Account even if the same has not run for a
minimum maturity of 6 months, subject to the condition that the rate of
interest should not exceed the rate payable on savings bank deposits held
under RFC Account Scheme. 3. The above instructions are
issued under Sections 21 and 35A of the Banking Regulations Act, 1949. Yours faithfully (M.P. Kothari) General Manager |
|