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Q-4 Can a NRI grant power of Attorney to a resident?
A. An NRI is free to grant Power of Attorney to a Resident. However, such Power of Attorney is restrictive. The Power of Attorney holder can do local operations and give deposit renewal instructions. Power of Attorney Holder can not instruct to transfer funds abroad.
Q.5 What are the rules regarding pre-mature payments?
A. The Bank may permit payment of deposit before maturity. The rules in this respect are broadly as under:
(i) FCNR / NRE Scheme:
· No interest is payable if the deposit is withdrawn before expiry of minimum maturity of 12 months from the effective date of deposit.
· In other cases, interest is payable at a rate applicable on the date of deposit for the period run or the contracted rates, whichever is less, minus 1 % penalty in respect of NRE Deposits. For FCNR Deposits, interest is payable at a rate applicable on the date of the deposit for the period run minus 1 % penalty. However, if the applicable rate is less than 1%, no deduction will be made from principal amount.
(ii) NRO Deposits:
· No interest is payable if the deposit is withdrawn before expiry of 15 days in case of term deposit
· Interest is payable at a rate applicable on the date of deposit for the period run or the contracted rate, whichever is less, minus 1 % penalty.
Q.6 Is any interest payable on overdue deposits?
A. (1)FCNR / NRE Deposits schemes:
When renewal instructions are received by the branch where the deposit account is maintained, within 14 days of the due date, renewal with retrospective effect (i.e. from the due date) is permitted.
The rate of interest payable on the amount of deposit so renewed will be appropriate rate for the period of renewal as prevailing on the date of maturity OR on the date when depositor seeks renewal (i.e. date of renewal) whichever is lower.
* When renewal instructions are received after 14 days from the due date, renewal with retrospective effect (i.e. from the due date) is not permitted. However, simple interest for the overdue period is payable at 4 % p.a. or at minimum rate of interest for the currency prevailing on the date of renewal, whichever is lower.
(2)NRO Deposits
Overdue deposits can be renewed with retrospective effect (i.e. from the due date), provided they are renewed for a minimum period of 15 days from the date of renewal.
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