The Foreign Currency Non-Resident (Bank) —or FCNR(B) —deposit scheme is a term-deposit instrument regulated by the Reserve Bank of India (RBI) under the provisions of the Foreign Exchange Management Act (FEMA), 1999 and Section 35A of the Banking Regulation Act, 1949 . The Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), and Persons of Indian Origin (PIOs) can open fixed term deposits in designated foreign currencies with authorized commercial banks in India. In Indian macroeconomic policy, the FCNR(B) scheme acts as a critical Capital Account instrument used to bolster foreign exchange reserves, absorb external sector shocks, and stabilize the Balance of Payments (BoP). Evolution and Historical Context FCNR(B) Scheme w as first Introduced on May 15, 1993, replacing the original FCNR(A) scheme (introduced in 1975). In the FCNR(A) Scheme, the foreign exchange risk was borne by RBI and subsequently by the Govt. of India. The FCNR(A) scheme was withdrawn in A...
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