Module: | FCNR(B) & Loan Regulations
Q15: Rita holds a USD 50,000 FCNR(B) Fixed Deposit, with a tenure of 3 years. One year into the term, she faces a liquidity crunch in India. She approaches the bank, to discuss her options. Which of the following statements, correctly outline the rules for managing this deposit?
1. She can request a partial withdrawal of USD 5,000 converted to Rupees, but this generally entails breaking the existing deposit, and creating a new one for the balance.
2. If she closes the entire deposit before completing one year, no interest will be paid.
3. She can instruct the bank, to credit the periodic interest earned on this FCNR(B) deposit, directly into her NRE savings account.
4. She can convert the entire FCNR(B) deposit, into an NRO Fixed Deposit, without any penalty.
2. If she closes the entire deposit before completing one year, no interest will be paid.
3. She can instruct the bank, to credit the periodic interest earned on this FCNR(B) deposit, directly into her NRE savings account.
4. She can convert the entire FCNR(B) deposit, into an NRO Fixed Deposit, without any penalty.
✅ Correct Answer: C
Partial withdrawal from FCNR(B) usually requires restructuring the deposit.
No interest is paid if closed before 1 year.
Interest can be credited to NRE accounts.
No interest is paid if closed before 1 year.
Interest can be credited to NRE accounts.