FCNR | CAIIB NOV STUDY MATERIAL 2023

FCNR | CAIIB NOV STUDY MATERIAL 2023 | 2023 SHORT NOTES | SHORT NOTES FOR CAIIB NOV

This article deals with the FCNR topic of the CAIIB NOV 2023 EXAM along with CAIIB NOV 2023 Study Material.

On its official website, IIBF had published the CAIIB registration and exam dates. Candidates for the CAIIB who have been anxiously awaiting any information regarding the November CAIIB 2023 dates must now be reassured.

Now when we are done knowing the Examination dates for all the subjects, let’s take our discussion forward with the main topic for this article i.e, Foreign Currency Non-Resident Accounts.

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FOREIGN CURRENCY NON-RESIDENT ACCOUNT

Foreign Currency Non-Resident accounts are referred to as FCNR. An FCNR FD account is an option for NRIs who want to create a savings account in India. It enables you to keep money abroad in a foreign currency and generate positive returns. You are safe from any foreign exchange fluctuations and can receive risk-free returns because the funds are held in the foreign currency itself.

ELIGIBILITY FOR FCNR ACCOUNTS IN INDIA

Individuals from the following groups may create FCNR FD accounts in India:

• Indian non-residents (NRIs).
• Overseas Indians are also referred to as Persons of Indian Origin (PIOs).

PIOs: People who are of Indian origin through birth or descent are known as persons of Indian origin. There can be a few exclusions that apply to residents of Bangladesh and Pakistan.

FACTORS TO CONSIDER

Before selecting an FCNR account, keep the following important considerations in mind:

• Family: When opening an FCNR FD account, the first item to think about is whether an NRI’s family member or relative in India can manage the account using a mandate card provided by the bank.
• Currency: You must be aware of the FCNR currency denominations that are available for opening an account. Examine the hazards related to currency rates as well.
• Taxes: In the nation where the depositor resides, are the principal and interest from the funds in the FCNR FD account taxable?
• Repeatability: Is it possible for banks to return the money in FCNR fixed deposit accounts in foreign currency?

FEATURES OF FCNR FD ACCOUNT

• Following that, the interest rates on FCNR accounts are compounded every six months. They become due following the conclusion of the first year.
• Accounts with FCNR are available for a minimum of one year and a maximum of five years.
• An FCNR FD account may have two or more shared NRI account holders. Having a joint account with someone who resides in India is not permitted.
• The US dollar, Japanese yen, euro, and other major currencies can all be used to open FCNR accounts.

ADVANTAGES OF FCNR ACCOUNT

The advantages of creating an FCNR fixed deposit account are as follows:

• Banks may grant account holders loans secured by funds in FCNR FD accounts.
• The maturity revenues of the FCNR FD amount may be used to pay off any foreign currency loans acquired outside of India by the account holder.
• The FCNR FD account’s interest and principal are both free and without limits transportable (movable) to the depositor’s home country.
• Forex rate risks are unquestionable because FCNR accounts are kept in a foreign currency. In other words, there is no exchange loss because the interest and principal are both transferred in the currency used to operate the account.

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DISADVANTAGES OF FCNR ACCOUNT

Despite the fact that FCNR fixed deposits are a profitable alternative for NRIs, there are a few drawbacks to be aware of before investing. Let’s look at this:

• There is a chance that an FCNR FD account you open with a bank other than one of the top banks won’t be able to repay you when it matures. Even the credit guarantee in India has a Rs.5,000 cap on it. The nearly non-existent deposit insurance raises serious issues for FCNR deposit account holders.
• Owners of FCNR FD accounts have 14 days following the maturity date to renew their FCNR FDs. If they don’t, the bank renews the interest rates on the FCNR. The bank has the right to demand the interest it has already paid in the event of an early withdrawal.
• Before maturity, FCNR accounts may be transferred to other NRE accounts. Foreseeable withdrawal fees may apply in this case. The bank may further impose switching fees.
• For savings, recurring, and current accounts, FCNR deposits are not accessible. Only term deposits may be offered with them.
• As was already noted, FCNR FD interest is not subject to taxes in India. However, the NRI’s country of residency may impose taxes on it.
• For savings, recurring, and current accounts, FCNR deposits are not accessible. Only term deposits may be offered with them.
• In the event of a financial collapse, the banks might not be able to repatriate money.
• If the depositor withdraws the FCNR FD in less time than a year, no interest is due.
• In India, loans in foreign currencies secured by FCNR accounts can only be obtained by account holders.

DURATION OF FCNR ACCOUNT

Banks are permitted to take FCNR Deposits for a maximum of 5 years, under new RBI regulations. Unlike most conventional domestic time deposits, the minimum term is defined as one year. In other words, the duration of FCNR deposits can be anywhere between 1 and 5 years.

CAIIB NOV 2022 STUDY MATERIAL

Learning Sessions used the most recent IIBF exam pattern and syllabus to develop the CAIIB study guide. It includes the following:

• The video lectures were produced by subject-matter specialists.
• Videos that demonstrate current Concept knowledge are in accordance with the most recent CAIIB Syllabus 2023.
• The lessons or classes are created utilizing a combination of Hindi and English for all subjects except for ABM and BFM whose lectures are also available in English only language.
• Case studies are also present in our CAIIB NOV 2023 Study material 2023.
• Mock tests are also a part of our program for practice.
• The package also contains memory-based questions from earlier CAIIB Exams.
• Live classes are also included in our CAIIB study material package 2023.
• Video lectures can be downloaded offline in the program, except for live YouTube videos and app courses.
• Access to ePDF notes will also be available through the app. These notes are complementary to the video lectures.

Read Also: CASH FLOW AND ITS TYPES | CAIIB NOV/DEC EXAM 2023

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