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FCNR(B) Accounts Now Allowed in Any Freely Convertible Currency

Current · Source: Reserve Bank of India · RBI/2011-12/225 · issued 19 Oct 2011 · ~1 min read
Quick answerRBI has liberalised FCNR(B) deposit rules: banks can now accept deposits in any freely convertible currency, not just the six previously designated currencies. This follows a committee recommendation and expands NRI deposit options.
The rule, in the simplest words
How it plays out — a real example

Rahul, a forex & trade-finance officer in Indore, is now able to offer FCNR(B) accounts in a variety of currencies to his NRI clients, including the Swiss Franc and the Singapore Dollar. This expanded option allows him to cater to the diverse currency preferences of his clients and increase the bank's competitiveness in the market.

What changed

Previously, FCNR(B) deposits were restricted to six designated currencies: Pound Sterling, US Dollar, Japanese Yen, Euro, Canadian Dollar, and Australian Dollar. Now, AD banks are permitted to accept FCNR(B) deposits in any 'permitted currency', defined as a freely convertible currency under FEMA regulations.

What it means for you

Banks can now offer FCNR(B) accounts in a wider range of currencies, potentially attracting more NRI deposits by catering to currency preferences. This liberalisation may increase competition among banks for NRI funds and require updates to deposit systems and currency risk management. It aligns with the committee's recommendation to enhance flexibility for individuals under FEMA.

What you must do

Who it affects

Authorised Dealer (AD) banks in India, NRI depositors holding or seeking FCNR(B) accounts, Treasury and forex operations teams at banks

❓ Common questions

What currencies were previously allowed for FCNR(B) accounts?

Only six currencies were designated: Pound Sterling, US Dollar, Japanese Yen, Euro, Canadian Dollar, and Australian Dollar.

What does 'permitted currency' mean in this circular?

It means any foreign currency that is freely convertible, as defined in Regulation 2(v) of FEMA 14/2000-RB, as amended.

Do banks need to seek additional approval to offer new currencies?

No, the circular itself permits AD banks to accept deposits in any permitted currency without further RBI approval, subject to other applicable laws.

📜 Read the original circular — full text as issued by RBI
RBI/2011-12/225 A.P. (DIR Series) Circular No. 36 October 19, 2011 To, All Banks Authorised to Deal in Foreign Exchange Madam/Sir, Opening Foreign Currency (Non-Resident) Account (Banks) Scheme [FCNR(B)] account in any freely convertible currency – liberalisation Attention of Authorised Dealer (AD) banks is invited to the Paragraph 2 of Schedule 2 to the Notification No.FEMA 5/2000-RB dated May 3, 2000 , viz. Foreign Exchange Management (Deposit) Regulations, 2000, as amended from time to time, read with Notification No. FEMA 14/2000-RB dated May 3, 2000 , viz. Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2000, as amended from time to time, in terms of which deposit of funds in the Foreign Currency (Non-Resident) Account (Banks) Scheme [FCNR(B)] accounts may be accepted in such permissible currencies as may be designated by the Reserve Bank from time to time. Presently, Pound Sterling, US Dollar, Japanese Yen, Euro, Canadian Dollar and Australian Dollar are the currencies designated by the Reserve Bank. 2. The Committee to Review the Facilities for Individuals under FEMA, 1999 in its Report has recommended that FCNR(B) accounts may be permitted to be opened in any freely convertible currency. 3. On a review, it has been decided that AD banks in India may be permitted to accept FCNR (B) deposits in any permitted currency. It may be noted that 'Permitted currency' for this purpose would mean a foreign currency which is freely convertible as defined in terms of Regulation 2(v) of FEMA 14/2000-RB dated May 3, 2000, as amended from time to time. 4. Authorised Dealer banks may bring the contents of this circular to the notice of their account holders concerned. 5. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law. Yours faithfully, (Meena Hemchandra) Chief General Manager In-Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2011-12/225 · issued 19 Oct 2011. The plain-English explanation above is BankPulse’s own independent summary.
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Who does what — compliance checklist
💻 IT / Systems
  • Update internal policies and systems to accept FCNR(B) deposits in any freely convertible currency.
📜 Compliance
  • Train staff on the new definition of 'permitted currency' and ensure compliance with FEMA regulations.
  • Communicate the expanded currency options to existing and potential NRI account holders.
  • Review currency risk management frameworks to handle a broader range of foreign currencies.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template

Example: if you are an IT/Systems lead at a bank this circular applies to (Authorised Dealer (AD) banks in India, NRI depositors holding or seeking FCNR(B) accounts, Treasury and forex operations teams at banks), your first concrete step on “FCNR(B) Accounts Now Allowed in Any Freely Convertible Currency” is: “Update internal policies and systems to accept FCNR(B) deposits in any freely convertible currency.” (RBI issued this 19 Oct 2011).

  1. Circular: RBI/2011-12/225 -- FCNR(B) Accounts Now Allowed in Any Freely Convertible Currency
  2. Issued: 19 Oct 2011
  3. Action required: Update internal policies and systems to accept FCNR(B) deposits in any freely convertible currency.
  4. Action required: Train staff on the new definition of 'permitted currency' and ensure compliance with FEMA regulations.
  5. Action required: Communicate the expanded currency options to existing and potential NRI account holders.
  6. Action required: Review currency risk management frameworks to handle a broader range of foreign currencies.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.

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Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=6766&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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