Accounts for Foreign (Currency/Person) in India

a) NRO A/c (Foreign Tourist)

1) Foreign tourists during their short visit to India can open a Non-Resident (Ordinary) Rupee (NRO) account (Current / Savings) with any Authorised Dealer bank dealing in foreign exchange. Such account can be opened up to a maximum period of 6 months.

2) Tourists can freely make local payments through the NRO account. All payments to residents exceeding INR 50,000 can be made only by means of cheques / pay orders / demand drafts.

b) EEFC A/c

1) Exchange Earners' Foreign Currency Account (EEFC) is an account maintained in foreign currency with an Authorised Dealer i.e. a bank dealing in foreign exchange.

2) It is a facility provided to the foreign exchange earners, including exporters, to credit 100% of their foreign exchange earnings to the account, so that the account holders do not have to convert foreign exchange into Rupees and vice versa,

thereby minimizing the transaction costs.

3) All categories of foreign exchange earners, such as individuals, companies, etc. who are resident in India, may open EEFC accounts.
4) An EEFC account can be held only in the form of a current

account. No interest is payable on EEFC accounts.

DICGC (Deposit Insurance and Credit Guarantee Corporation of India) - Awareness

1. What is the maximum deposit amount insured by the

DICGC?

Each depositor in a bank is insured upto a maximum of Rs.1,00,000 (Rupees One Lakh) for both principal and interest amount held by him in the same capacity.

2. Does the DICGC insure just the principal on an account or both principal and accrued interest?

The DICGC insures principal and interest upto a maximum amount of Rs. One lakh.

NEFT AND RTGS

NEFT: National Electronic Funds Transfer (NEFT)

Under this Scheme, individuals, firms and corporates can electronically transfer funds from any bank branch to any individual, firm or corporate having an account with any other

bank branch in the country participating in the Scheme.

Limit using NEFT:

There is no limit – either minimum or maximum – on the amount of funds that could be transferred using NEFT.

However, maximum amount per transaction is limited to Rs.50,000/- for cash-based remittances and remittances to Nepal.

RTGS:

Real Time Gross Settlement, which can be defined as the continuous (real-time) settlement of funds transfers individually

on an order by order basis (without netting). 'Real Time' means the processing of instructions at the time they are received rather than at some later time; 'Gross Settlement' means the settlement of funds transfer instructions occurs individually (on an instruction by instruction basis).

Limit using RTGS:

The RTGS system is primarily meant for large value transactions.

The minimum amount to be remitted through RTGS is Rs. 2 lakhs. There is no upper ceiling for RTGS transactions.

RTGS vs NEFT

NEFT is an electronic fund transfer system that operates on a Deferred Net Settlement (DNS) basis which settles transactions in

batches. Contrary to this, in the RTGS transactions are processed

continuously throughout the RTGS business hours.