Can accounts be maintained by NRIs/OCBs in foreign currencies?
Yes. Accounts in foreign currencies (FCNR accounts) can be maintained by NRIs/OCBs with authorised dealers in India

What are the foreign currencies in which such accounts can be maintained?
FCNR Accounts can be maintained in Pound Sterling, U.S. Dollar, Deutsche Mark (upto December 2001), Euro and Japanese Yen.

Are FCNR accounts permitted to be maintained in the form of current/savings accounts?
No. FCNR accounts can be maintained only in the form of 'term deposits', i.e. a deposit kept for fixed periods ranging from 6 months to 3 years.

Is premature withdrawal of the FCNR term deposit allowed?
Yes. However, this is subject to the levy of a penalty.

What is the penalty for premature withdrawal of a FCNR deposit?
Interest in such cases is paid at one per cent below the interest rate payable for the period for which the deposit has actually run. Interest on deposits is, however, payable only if they are kept for a minimum period of six months. Incidentally, these matters are governed by the instructions/directives issued by Reserve Bank .

If a FCNR deposit of 6 months maturity is withdrawn prematurely, would any interest be payable?
No. While the premature withdrawal would be allowed, no interest would be payable. For such premature withdrawals the bank may levy penalty as per their discretion.

Are the interest rates on FCNR deposits liable for periodical revision?
Yes. The Banks have been permitted to offer interest on such deposits at rates not in excess of LIBOR minus 25 basis points in respect of the deposits of 6 months and above but less than one year and LIBOR + 50 basis points in respect of deposits of maturity of one year and above. (LIBOR rate prevailing on the last working day of the previous week for the relevant maturity and currency.) Subject to this guideline, banks can offer either fixed or floating rate of interest on such deposits. MORE