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Q.7 How to avoid loss of interest on Overdue Term Deposits?
A. Automatic Renewal Scheme:
The best way of avoiding loss of interest on overdue deposit is to give renewal instruction before the due date. Remembering various due dates and ensuring that renewal instructions alongwith original deposit receipts reach the bank is cumbersome. Bank of India has, therefore, introduced free of charge Safe Custody and Automatic Renewal Scheme. Under the scheme, the original deposit receipt remains with the bank. However, a copy is sent to depositor. On due date, the bank renews the deposit for similar period and mails a copy of the renewed deposit receipt while retaining the original with themselves under safe custody Automatic Renewal Scheme. The depositor is free to give any contrary instructions which should reach the Branch before due date.
Q.8 What happens to the existing accounts of persons after they become NRIs?
What are N.R.O. accounts?
A. The accounts of erstwhile Resident Indian are designated as Non-Resident Ordinary (NRO) Accounts. NRIs can also open NRO accounts for collecting their local accruals in India. The rates of interest on domestic deposits are applicable to these accounts. Income Tax is deductible at source on the interest earned.
Remittance/s upto USD 1 Mn. for any purpose per calendar year from the balances in NRO Accounts is permitted subject to payment of applicable taxes. The limit of USD 1 Mn. per year includes sale proceeds of immovable properties held by NRIs/ PIOs for a period of 10 years. In case a property is sold after being held for less than 10 years, remittance can be made if the same proceeds have been held by the NRI/PIO for the balance period.
Q.9 What happens when an NRI becomes Resident?
A. As per prevailing exchange control regulations, NRI is required to intimate his banker about change in his residential status immediately on returning to India. His Rupee accounts are immediately redesignated as resident Rupee accounts. Further, Rupee Term Deposits are continued at the contracted rate of interest till due date. FCNR deposits are permitted to be continued at the contracted rates of interest till due date. NRIs are also at liberty to keep the funds in US Dollars by opting for Resident Foreign Currency (RFC) accounts.
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