OBC left Menu
Quick Info
Visitor No.:   49085715



Print Font :- Small Text Standard Text Large Text
Home >> Services >> NRI Services  >> >> Oriental NRI Premium Deposit Account.
Oriental NRI Premium Deposit Account.

Particulars

Oriental NRI Premium Deposit Account- Features

Who is eligible

NRIs (Citizens of Bangladesh/ Pakistan nationality require prior approval of RBI)

Type of Account

FCNR (Term Deposit)

Tenor of Deposit

1 Year

Minimum Amount

A minimum amount Equivalent of USD 5000. There is no restriction on the maximum amount

Currency in which the Deposit Receipt would be denominated

The Deposit would be denominated in Pound Sterling, US Dollar, Euro, Canadian Dollar and Australian Dollar.

Branches which can operate this scheme

Branches Authorized to deal in Foreign Exchange

Manner of receipt of Funds.

  • 1. Inward Remittance from Abroad in permitted currencies- SWIFT, Telegraphic Transfers, personal cheques drawn on accounts maintained abroad, Drafts issued by Banks/ Exchange Companies abroad
  • 2. Conversion from NRE Account at the appropriate exchange Rate.
  • 3. Proceeds of Foreign Currency Notes/Travellers Cheques tendered in person by NRI during personal visit to India. Amounts in excess of USD 5000 (or equivalent) in currency or USD 10,000 (or equivalent) in Travellers Cheques should be accompanied by a Currency Declaration orm.

How the Scheme Works

  • The Customer places an FCNR deposit for a period of 1 year from the funds received by any of the methods mentioned above.
  • Customer indicates his intention to place the funds in Oriental NRI Premium Deposit Account by submitting his AOF along with an application to book forward contract
  • The positive premium available in the market will accrue as an additional return to the customer.
  • FD is prepared and forward contract is booked by the Branch for the maturity proceeds due on maturity date. Original FDR and application for forward contract is retained by branch and attested copy of FDR along with confirmation of Forward contract is handed over to the customer
  • On due date, bank will buy FC maturity proceeds at the specified rate and credit the rupee equivalent in his nominated NRE a/c.

Currency of Payout to the Customer on maturity

The Foreign Currency Funds will be converted to Indian Rupees at the contracted rate by utilizing the Forward Purchase contract, booked at the time of creating the FCNR and the customers NRE account will be credited in Indian Rupees.

Return to the customer

The Rate of Interest as applicable to FCNR deposit of tenor 1 year would be applicable.

The premium available in the market which would accrue on account of booking of the forward contract would be an additional benefit

Benefit of the scheme

The scheme would benefit those NRI customers who wish to keep their funds in NRE-FD.

The scheme would be beneficial till such time there is positive forward premium available in the market.

Joint account

In the names of two or more non-resident individuals provided all the account holders are persons of Indian nationality or origin.

Nomination

Permitted

Repatriablity

Repatriable

Operations by Power of Attorney in favour of a resident by the non-resident account holder

Operations in the account in terms of Power of Attorney is restricted to withdrawals for permissible local payments or remittance to the account holder himself through normal banking channels

Loans In India

i) to the Account holder

i) to Third Parties

 

Permitted

Permitted

Pre-mature Breakage of FCNR

Permitted

Consequence of Pre-mature Breakage of FCNR

Since the FCNR Deposit is booked for 1 year, no interest is payable as per RBI guidelines for deposits less than 1 year.

The forward Contract would have to be cancelled prematurely and the loss, if any accruing on account of such cancellation will have to be recovered from the customer.

Further, a forward contract once cancelled is not eligible to be re-booked.

Premature Cancellation of Forward Contract

Permitted. The Deposit will continue as a normal FCNR Deposit. Similar consequences as mentioned in the column above would apply.

Tax Benefit

Since the term deposit will be in the form of FCNR, as per existing rules; income earned by way of interest on deposits under FCNR Scheme is exempted from income tax.

Documentation

1. OFE 148/529 - NRE/FCNR/ NRO Account opening orms duly filled up

  • 2. Application for forward contract in triplicate
  • 3. Confirmation from customer of the forward contract booked on his behalf

 and a stamped Contract Note to be executed by the customer (stamping

in accordance with the stamp duty 

applicable to the particular state. 

  • 4. In case the customer is not having a

NRE a/c, the same to be opened.

Charges for Booking of Forward Contract

NIL

Illustration

A comparative study of the Return to customer on his deposit  under this scheme vis a vis the return on NRE Deposit (say at a particular time on 02nd June 2011) is given below:

Return in case Funds are placed in NRE Fixed Deposit for 1 Year

 

Initial Deposit: Rs 5,00,000/-

Rate of interest: 2.48%

Return After 1 year: Rs 5,12,400/-

 

 

 

 

 

Effective Return: 2.48%

Return in case of Funds Lying in NRE Savings Account

 

Initial Deposit: Rs 5,00,000/-

Rate of interest: 4%

Return After 1 year: Rs 5,20,000/-

 

 

 

 

 

Effective Return: 4%

Return in case Funds are placed in Oriental NRI Fixed Deposit Account

 

 

 

 

Initial Deposit: Rs 5,00,000/-

Spot Rate: 45.00*

Forward Contract Rate: 47.37*

(* The rates are subject to change from time to time.)

Amount Converted to FCNR Deposit of USD 11,111.11

FCNR Interest for 1 year: 1.73%

Maturity value of FCNR: USD 11,303.33

Maturity value of FCNR converted back to rupee using the forward contract rate: Rs 5,35,439/-

 

Effective Return: 7.09%