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PUNJAB & SIND BANK
(A Govt. of India Undertaking)
HO Foreign Exchange
Department
3rd Floor, Bank House
21, Rajendra Place, N Delhi-
110125
: 011- 25728460, 25728462 Fax: 011-25747782 ; E-mail:ho.fex@psb.org.in
Circular No . :

1684/13/12
Date
18/04/2012
Code No. of the Department

H 9007
Number of pages of Circular

12
Running circular No of the Bank


181/ 2012
TO ALL BRANCHES/CONTROLLING OFFICES
REG : MASTER CIRCULAR on FCNR Deposits



GUIDELINES FOR BRANCHES IN CONSONANCE WITH RBIS GUIDELINES ON
FCNR ARE AS UNDER:
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PREFACE
S.NO. CONTENTS PAGE NO.
1. Opening of FCNR (B) Account 3
2. Definition of the term Deposit 3
3. Features of FCNR (B) Scheme 3
4. Manner of payment of Interest 4
5. Premature withdrawal of deposits 4
6. Payment of interest on overdue FCNR (B) Deposits 5
7. Restrictions on advances against FCNR (B) Deposits 5-6
8. Interest payable on the deposit of a deceased depositor 6-7
9. Addition or deletion of name/s of joint account holders 7
10. Payment of interest on FCNR (B) deposits of NRIs on return to India 7-8
11. Conversion of FCNR (B) Accounts of Returning Indians into RFC
Account - Waiver of Penalty
8
12. Conversion of FCNR (B) Accounts of Returning Indians into RFC
Accounts/Resident Rupee Accounts- Payment of interest
8
13. Payment of interest on term deposit maturing on Saturday/Sunday/
holiday/non-business working day
8
14 Annexure-I Definition of Relatives 9
15 Account Opening Form & Declaration 10-12
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The Foreign Currency (Non Resident) Accounts (Banks) Scheme (FCNR B) was
introduced with the effect from May 1993 to replace the then prevailing FCNR (A),
where the foreign exchange risk was borne by RBI and subsequently by the Govt. of
India.
Presently bank is offering FCNR (B) deposit scheme in five currencies i.e. for US
Dollar, Pound Sterling, EURO, Canadian Dollar and Australian Dollar.

Opening of FCNR (B) Account
1) . FCNR (B) accounts can be opened by following persons:
a) Non-resident individuals of Indian nationality or origin (NRIs).
b) Jointly by two or more Non Resident Individuals on either or Survivor basis.
c) Jointly by Non Resident Individuals with resident close relative (relatives as
defined in Section 6 of the Companies Act, 1956 Annexure I) on a Former
or Survivor basis.
2) KYC/AML etc guidelines issued by bank from time to time to be complied with
3) Nomination facility available.

Definition of the term Deposit
The deposits under the Scheme mean term deposits received by the branch for a
fixed period and withdrawable only after the expiry of the said fixed period and
includes Reinvestment Deposits.
Features of FCNR (B) Scheme
1. Repatriation of funds in foreign currencies is permitted.
2. The deposits can be accepted under the Scheme for the following maturity
periods:
(a) One year and above but less than two years
(b) Two years and above but less than three years
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(c) Three years and above but less than four years
(d) Four years and above but less than five years
(e) Five years only
Note: Recurring Deposits are not permitted under FCNR (B) Scheme.
3. Transfer of funds from existing NRE accounts to FCNR (B) accounts and vice
versa, of the same account holder, is permissible without the prior approval of
Reserve Bank of India.
Manner of payment of Interest
1. The interest on FCNR (B) deposits should be calculated and paid at intervals of
180 days each and thereafter for the remaining actual number of days. However,
the depositor has the option to receive the interest on maturity with
compounding effect.
2. The rate fixed by the bank for deposits of staff members, existing or retired,
should not exceed the ceiling rate prescribed by RBI. However, presently our
bank is offering interest rate to all clients up to maximum ceiling permitted by
RBI, as such, no additional interest is to be paid to staff.
Premature withdrawal of deposits
1. Branch on request from the depositor may permit premature withdrawal of
deposits under the FCNR (B) Scheme. Branches are advised to charge interest as
under in case of premature withdrawal of FCNR (B) Deposit:
Withdrawal before one year- no interest is payable.
When withdrawal is on / after completion of one year 1% penalty to be
charged on applicable interest rate prevailing on the date of placement of the
deposit for the completed period.
2. Conversion of FCNR (B) deposits into NRE deposits is also subject to the penal
provision relating to premature withdrawal.

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Payment of interest on overdue FCNR (B) Deposits
Branches may renew an overdue deposit or a portion thereof provided the overdue
period from the date of maturity till the date of renewal (both days inclusive) does not
exceed 14 days. The rate of interest payable on the amount of the deposit so renewed
should be the appropriate rate of interest for the period of renewal as prevailing on the
date of maturity or on the date when the depositor seeks renewal, whichever is lower.
In the case of overdue deposits where the overdue period exceeds 14 days and if the
depositor places the entire amount of overdue deposit or a portion thereof as a fresh
FCNR (B) deposit, branches are advised as under to pay overdue interest on the
amount so placed as fresh FCNR deposit as under:

In absence of any instructions for automatic renewal already given by party, overdue
interest to be paid as per following rates for the intervening period at the time of
renewal.

GBP 0.50%
EURO 0.75%
USD 0.50%
CAD 0.50%
AUD 1.50%

Note: In case the depositor has given mandate / instructions for automatic renewal
of FCNR, issue of payment of overdue interest does not arise.

Furthermore, Branches will recover the interest so paid for the overdue period if the
deposit is withdrawn before completion of the minimum stipulated period under the
scheme, after renewal.
Restrictions on advances against FCNR (B) Deposits -

As per RBI guidelines in force as on date, Banks are prohibited from granting fresh
loans or renewing existing loans in excess of Rupees 100 lacs against FCNR (B)
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deposits either to the depositors or third parties. Branch should not undertake artificial
slicing of the loan amount to circumvent the ceiling.
(Branches to refer to HO Advances Circulars issued from time to time in respect
of interest, margin & quantum of loan against FCNR)
Interest payable on the deposit of a deceased depositor
In the case of a term deposit standing in the name/s of -
1. A deceased individual depositor, or

2. Two or more joint depositors, where one of the depositors has died, interest
should be paid in the manner indicated below:

i. At the contracted rate on the maturity of the deposit;
ii. In the event of the payment of the deposit being claimed before the maturity
date, the branch should pay interest at an applicable rate prevailing on the
date of placement of the deposit, without charging penalty;
iii. In the event of death of the depositor before the date of maturity of the
deposit and the amount of the deposit being claimed after the date of
maturity, the branch should pay interest at the contracted rate till the date of
maturity. From the date of maturity to the date of payment, the branch
should pay simple interest at the applicable rate operative on the date of
maturity, for the period for which the deposit remained with the branch
beyond the date of maturity. However, in the case of death of the depositor
after the date of maturity of the deposit, the branch should pay interest at a
rate operative on the date of maturity in respect of savings deposits held
under RFC Account Scheme, from the date of maturity till the date of
payment;
iv. If, on request from the claimant/s, the branch agrees to split the amount of
term deposit 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
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term deposit for the purpose of levy of penalty provided the period and
aggregate amount of the deposit do not undergo any change.
Note: In the case of claimant/s being residents, the maturity proceeds may be
converted into Indian rupees on the date of maturity and interest be paid for the
subsequent period at the rate applicable to a deposit of similar maturity under the
domestic deposit scheme.
Addition or deletion of name/s of joint account holders
A branch may, at the request of all the joint holders, allow the addition or deletion of
name/s of joint account holder/s if the circumstances so warrant or allow an
individual depositor to add the name of another person as a joint holder. However, in
no case should the amount or duration of the original deposit undergo a change
in any manner whatsoever, and all the joint account holders should be non-
residents of Indian nationality or origin. The branch should ascertain the reasons
from the applicants for doing so and also satisfy them about the bona fide nature of
the request. Further, opening of accounts in the names of Pakistani/Bangladeshi
nationals, though of Indian origin, will require approval of the Reserve Bank from
the exchange control angle.
Note: As per AP (Dir Series) Circular No 13 dt 15.09.2011, now Non Resident
Individuals NRI in India are permitted to open NRE/FCNR (B) account with their
resident close relative (relatives as defined in Section 6 of the Companies Act, 1956 -
given in annexure-I) on a Former or Survivor basis. The resident close relative
shall be eligible to operate the Account as Power of Attorney holder in accordance
with the extant instructions during the life of NRI/PIO account holder.
Payment of interest on FCNR (B) deposits of NRIs on return to India
Branch may allow FCNR (B) deposits of persons of Indian nationality/origin who
return to India for permanent settlement to continue till maturity at the contracted rate
of interest, if desired. Such deposits should be treated as resident deposits from the
date of return of the account holder to India. Premature withdrawal of such FCNR (B)
deposits should be subject to penal provisions of the Scheme. Branch should convert
the FCNR (B) deposits on maturity into Resident Rupee Deposit Account or RFC
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Account (if eligible) at the option of the account holder. The rate of interest on the
new deposit (Rupee account or RFC Account) should be the relevant rate applicable
for such deposit account.
Conversion of FCNR (B) Accounts of Returning Indians into RFC Account
a) Waiver of Penalty in case of deposit having run for minimum period of deposit:
The penal provisions would not be applicable in the case of premature conversion of
balances held in FCNR (B) deposits into Resident Foreign Currency Accounts by
Non-Resident Indians on their return to India.
b) If deposit has not run for minimum period of deposit
If the deposit has not run for a minimum maturity period (I year at present)
branches should pay interest as applicable on saving bank on RFC accounts
prevailing at the time of conversion of FCNR(B) Account into RFC / Resident
Rupee Account .
Payment of interest on term deposit maturing on Saturday/Sunday/ holiday/non-
business working day
In case of reinvestment deposits, branch should pay interest for the intervening
Saturday/Sunday/holiday/non-business working day on the maturity value. However,
in the case of ordinary term deposits, the interest for the intervening
Saturday/Sunday/holiday/non-business working day should be paid on the original
principal amount.

Branches are advised to strictly follow the above guidelines in letter and spirit..


Asstt General Manager


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Anneure-I
Extracts from the Companies Act, 1956
Section 2 (41) relative means, with reference to any person, any one who is related to
such person in any of the ways specified in section 6, and no others:
Section 6. Meaning of relative:
A person shall be deemed to be a relative of another, if, and only if, -
(a) The are members of a Hindu undivided family; or
(b) They are husband and wife or
(c) The one is related to the other in the manner indicated in Schedule IA.]
[ Schedule IA) [See section 6 (c)]
List of Relatives
1. Father.
2. Mother (including step-mother)
3. Son (including step-son).
4. Sons wife.
5. Daughter (including step-daughter).
6. Fathers father.
7. Fathers mother
8. Mothers mother.
9. Mothers father.
10. Sons son.
11. Sons Sons wife.
12. Sons daughter.
13. Sons daughters husband.
14. Daughters husband.
15. Daughters son.
16. Daughters sons wife.
17. Daughters daughter.
18. Daughters daughters husband.
19. Brother (including step-brother).
20. Brothers wife.
21. Sister (including step-sister)
22. Sisters husband.
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