FCNR (Foreign Currency Non Resident) FAQs

MUDRA is an abbreviation for Micro Units Development & Refinance Agency Ltd, is a financial institution set up by Government of India for development and refinancing micro units enterprises.

Yes, you can close your FCNR (B) fixed deposit account before maturity. If you close it before completion of 1 year, no interest will be paid to you. If you close it after 1 year, interest rate as on the date of deposit or on the date of closure, for the Period run, whichever is less, minus penalty will be paid to you. The penalty is usually 1%.

On your return to India, your FCNR deposit may be allowed to continue till maturity at the contracted rate of interest, if you wish so. Alternatively, your FCNR deposit account can be converted into resident rupee deposit account or RFC account (if you are eligible for the same) at your option.

If your account is opened under auto renewal mode (default mode in most of the banks) then bank will automatically renew the fixed deposit account at prevailing rates and it will keep earning interest rate on deposit. In case, you want to open the account under non-auto renewal mode, you need to give written instruction to the bank for the same.

Yes, loan facility available against your FCNR Deposit Account for permitted purposes, as per RBI guidelines and the amount of loan would depend upon the currency of the FCNR.

Yes. Banks presently have a restriction on granting fresh loans or renewing existing loans to individuals in India in excess of Rupees 1 crore against FCNR (B) deposit account.

The funds in an FCNR account should necessarily come from your overseas funds. Some of the credits to your FCNR account are:

  • Funds transferred from your overseas bank account.
  • Depositing foreign currency notes or travelers cheques on your visit to India.
  • Wire transfer or a cheque transaction.
  • Fund transferred from your existing NRE account.

Only Fixed / Term Deposit Account can be opened under FCNR(B) with maturity of minimum 1 year & maximum 5 years.