Master Direction - Deposits and Accounts (Updated as on June 29, 2026)
UR
- Applies toAll regulated entities
- StatusIn force
- RBI text changedRBI updated this document on September 02, 2026. BankPulse is re-reading it. BankPulse checked all 46 points on this page against RBI's new text on 11 October 2026. Every quoted line is still in RBI's text.
- IssuedJan 04, 2016
- Amendmentsnone tracked
- Length46 points in 4 sections · 4 min read
The four dates on this rule
- PublishedJan 04, 2016The day RBI put this document out. This is the same day as the Issued date on this rule.
- Starts to applyNot statedNot stated separately in this document. Read the rule itself before you assume a start date.
- Time to get readyNot statedCannot be worked out until the day it starts to apply is known.
- Last date to actNot statedNo date to act by was found in this document. Other dates may sit inside single paragraphs.
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32 of the 46 points name no product and bind every product. All products.
Numbers to remember
| 100 percent | 100 percent of a customer's inward remittance earnings may be credited to EEFC. RBI Part I §3.1 |
| six months | An FDI company must close its account within six months of opening. RBI Part I §3.11 |
| three months | Repatriate export proceeds by next month, or three months for IFSC-based accounts. RBI Part I §4.10 |
| five percent | Refund a nomination deposit if the nominee gets more than twenty five percent of votes. RBI Part II §11 |
| Rs.500 lakh | Overseas branch overdrafts on Vostro funding are capped at Rs.500 lakhs total. RBI Part III §1.6(i) |
What it says
How firm is each point
Stated by RBI — RBI’s own paragraph says this. We have only made it plainer.
Our reading — BankPulse read RBI’s paragraph and shortened it. The paragraph is the authority, not this line.
Needs judgement — RBI leaves this to the bank to settle, so nobody can give you a fixed number here.
Must know
1. EEFC accounts for exporters
Your bank may open an EEFC account for a resident's foreign exchange earnings.
2. EEFC credits 100 percent earnings
100 percent of a customer's inward remittance earnings may be credited to EEFC.
3. EEFC pays no interest
An EEFC account must be non-interest bearing.
4. No credit against EEFC
Your bank must not lend against balances held in EEFC accounts.
5. RFC accounts for residents
Residents may open an RFC account for pension, inheritance or similar foreign income.
6. RFC funds used freely
Money in an RFC account can be used freely outside India.
7. DDA account earns no interest
A Diamond Dollar Account must be a non-interest current account.
8. No EEFC for crew accounts
Ship-crew management foreign currency accounts get no EEFC facility.
9. One account per project
Each foreign project may hold only one foreign currency account.
10. SEZ units may hold accounts
SEZ units may hold a foreign currency account for their foreign exchange funds.
11. FDI account: six-month cap
An FDI company must close its account within six months of opening.
12. Student account becomes LRS
A student's foreign account becomes an LRS account once studies finish and they return.
13. Exporter accounts held abroad
Exporters may hold a foreign currency account abroad for export proceeds and advances.
14. Repatriate export proceeds fast
Repatriate export proceeds by next month, or three months for IFSC-based accounts.
15. NRIs may open NRE accounts
NRIs and PIOs may open NRE rupee accounts with your bank.
16. NRE loans: no fixed limit
Your bank may lend against NRE deposits without any limit, subject to margin rules.
17. No early withdrawal with loan
Premature withdrawal is blocked while a loan against the deposit is outstanding.
18. FCNR(B): fixed deposit only
FCNR(B) accounts can only be opened as fixed deposits.
19. NRO accounts for non-residents
Any non-resident may open an NRO account for rupee transactions in India.
20. Pakistan Bangladesh accounts need approval
Accounts for Pakistani or Bangladeshi nationals need the Reserve Bank's prior approval.
21. NRO cap: USD 1 million
NRO balances may be repatriated abroad by NRIs and PIOs up to USD 1 million.
22. SNRR account earns no interest
An SNRR account must not earn any interest.
23. SNRR Pakistan Bangladesh needs approval
SNRR accounts for Pakistani or Bangladeshi entities need the Reserve Bank's approval first.
24. No credit against escrow funds
No credit facility may be granted against escrow account balances.
25. No repatriable NRI deposits
An Indian company cannot accept repatriable deposits from NRIs or PIOs.
26. Refund deposit after director vote
Refund a nomination deposit if the nominee gets more than twenty five percent of votes.
27. Vostro accounts need no approval
Your bank may open or close overseas banks' rupee Vostro accounts without RBI's approval.
28. Pakistani bank Vostro needs approval
Vostro accounts for Pakistani banks need the Reserve Bank's specific approval.
29. Overdraft cap: Rs.500 lakhs
Overseas branch overdrafts on Vostro funding are capped at Rs.500 lakhs total.
30. Extra credit needs RBI approval
Extra credit beyond the overdraft cap needs the Reserve Bank's prior approval.
31. Exchange House accounts need approval
Opening a Vostro account for an Exchange House needs the Reserve Bank's approval.
32. Exchange House remittance cap
Trade remittances through Exchange Houses are capped at INR 15,00,000 per transaction.
Do it
1. Convert EEFC balances monthly
Your bank must convert each month's EEFC accruals into rupees by the next calendar month's end.
2. RFC joint holder can't operate
A joint resident relative cannot operate an RFC account while the holder is alive.
3. Close account at project end
Close the project's foreign currency account once the project finishes.
4. Close account after event
Close a conference account immediately once the event is over.
5. Nominee must repatriate proceeds
A resident nominee of a foreign account abroad must close it and bring the funds home.
6. NRE joint holder needs POA
A resident relative may only operate an NRE account as power of attorney holder.
7. Renew account every six months
Renew a pending-visa minority applicant's NRO account every six months.
8. Report accounts to MHA quarterly
Report these minority-community NRO accounts to the Home Ministry every quarter.
9. NRO dues capped yearly
Repatriate a departing foreigner's NRO dues up to USD one million per financial year.
10. Offer nomination to individuals
Offer a nomination facility to individual deposit holders.
11. Report overdraft within five days
Report an unresolved overdraft to RBI if it isn't cleared within five days.
12. Report Vostro list yearly
Send RBI your Vostro-account branch list every year by 15th January.
Background
1. 2026 update folds in Vostro
This 2026 update folds Vostro-account rules from another Direction into this one.
2. NRE interest is tax-free
Interest earned on NRE account balances is exempt from income tax.