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FCNR: Banking Awareness is considered to be the high scoring section in any competitive exam. It includes two main portions, current affairs GK and static GK. In this article, we will discuss some really important Banking Awareness topics that are covered in almost all competitive exams. Also, you can download the PDF of lists of different Banking Awareness topics.
In Banking Section, the questions are asked from following topics: History of Banking, banking terms, Marketing of Banking Products, Functions of Banks, Banks and their taglines, schemes, committees related to banking, headquarters of bank, some Banking news related, apps launched by banks, new schemes etc.
In a series of sharing useful study material for upcoming banking exams. Here, we are providing Banking Awareness notes for all banking Exams (IBPS, SBI & Other Banking Exams).
Banking Awareness Study Notes on FCNR (Foreign Currency Non-Resident) Account
An account that can be opened with an Indian bank by a Non Resident Indian or a Person of Indian Origin in foreign currency is FCNR (B) account. The letter B in FCNR (B) stands for the word ‘Bank’. It is an account that allows the NRI to keep his deposits in foreign currency. Hassles of conversion can be reduced through such types of accounts.
Salient features of an FCNR account
- FCNR is a foreign currency-denominated account.
- FCNR is not a savings account. It is a term deposit with a minimum tenure of 1 year and a maximum of 5 years.
- Interest income on FCNR accounts in nontaxable in India.
- Both principal and interest are freely repatriable in your resident country.
- It is possible to avail both rupee and foreign currency loans against your FCNR deposits.
Currencies are permitted under the FCNR scheme
According to the latest RBI circular in October 2011, FCNR permitted currencies are the ones that are freely convertible. These include the US Dollar, Pound Sterling, Euro, Japanese Yen, Canadian Dollar, Australian Dollar, Swiss Franc, Singapore Dollar, Danish Krone, and Hong Kong Dollar among others.
FCNR loan
An FCNR loan is a loan in foreign currency that is availed by NRIs or Indian corporates against an FCNR deposit at select Indian banks according to RBI guidelines.
Benefits of holding an FCNR account
The benefits of holding an FCNR account are numerous.
- First and foremost, FCNR allows you to invest your earnings in the currency of your residence country. This helps you to protect yourself from the volatility of exchange rates.
- Second, you don’t need to pay any income tax on your FCNR earnings in India. And the interest and principal are both freely repatriable.
- Third, you can avail of a loan in any currency you want against your FCNR deposit.
Maximum and minimum tenure of FCNR deposits
The minimum tenure of an FCNR deposit is 1 year and the maximum is 5 years. If you withdraw within a year, no interest is paid. If it is withdrawn within the tenure, a penalty may or may not be levied depending on the bank.
