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  • Canara
  • FCNR B Account

CANARA BANK DEMAND LOAN AGAINST FCNR (B) DEPOSIT SCHEME

The Bank offers a special loan facility against FCNR (B) deposits to Non-Resident Indian (NRI) and Overseas Citizen of India (OCI) customers through its Overseas Branches in IBU GIFT City, Gandhinagar and DIFC Dubai. This facility enables customers to augment their foreign currency investments over fixed tenors of three, four, or five years by availing financing of up to nine times their initial capital contribution. The proceeds, together with the customer's contribution, are deployed with the Bank branch in India, subject to the condition that the ownership structure of the deposit and the loan remains identical, with no third-party participation permitted. This product is currently available up to September 29, 2026, or such extended date as may be decided by the Bank, and may be modified or withdrawn at any time at the sole discretion of the Bank.

Overview:

This product is a structured loan facility, offering a 9:1 loan-to-contribution ratio for FCNR (B) deposits, subject to matching ownership and a strict deadline.

Key Product Rules:

  • Action item: Customers save at their own risk with Canara Bank India.
  • Loan Facility: Bank offers loans up to 9 times the client's own contribution.
  • Account: Combined funds are placed into an FCNR (B) deposit account.
  • Interest: Earned on the total deposit; charged on the provided loan amount.
  • Ownership: Deposit and loan ownership structures must be exactly identical.
  • Third-Party: Loans against deposits owned by a third party are strictly prohibited.
  • Deadline: Available only until September 29, 2026.
  • Discretion: Bank can withdraw or alter the product earlier without notice.

Product Information:

Here is the comprehensive product structure formatted as a clean, structured table based on the formal specifications:

S.No. Features Details
1. Target Group / Customers Customers eligible for the Canara Bank FCNR (B) deposit product.
2. Eligibility Exclusive to NRIs and OCIs aged 21 years and older (no maximum age limit); no appraisal or minimum credit rating criteria required.
3. Purpose Financing facility secured against a matching deposit maintained at any Canara Bank branch in India.
4. Type of Loan Demand Loan.
5. Currency of Loan USD only.
6. Loan Eligibility Up to 9 (nine) times the client's initial deposit amount.
7. Tenor 3 to 5 Years (maximum loan tenor must match the underlying FCNR (B) deposit period).
8. Margin 11.11% of the loan amount (Min. of USD 100,000)
9. Security First legal charge/lien over the underlying Canara Bank FCNR (B) deposits.
10. Processing Fee / Charges Nil.
11. Interest Rate Fixed rates per annum applied as follows:

3 Years – 5.70 % p.a.
4 Years – 5.75 % p.a.
5 Years – 5.80 % p.a.
12. Interest Periodicity Compounded Half-yearly.
13. Disbursement Full loan amount disbursed in a single tranche.
14. Repayment Bullet Payment at maturity.

The loan shall be co-terminus with the underlying Special FCNR (B) deposit.
15. Premature Closure Not Permitted.
16. Availability Period Available exclusively up to September 29, 2026.
17. Other Terms & Conditions Loans against deposits owned by a 3rd party are not eligible under the scheme.

How the product functions:

  • The Borrower shall pledge their initial deposit with Canara Bank domestic branch as sole collateral, against which the Bank shall extend a loan facility equivalent to nine times the value of the deposited amount.
  • The Borrower's initial contribution shall be combined with the bank loan proceeds to establish a total consolidated deposit equivalent to maximum of ten times the original contribution amount.
  • The total consolidated deposit shall be created by Canara Bank domestic branch for the purpose of opening a Foreign Currency Non-Resident (Bank) [FCNR(B)] account with a fixed tenure of three, four, or five years.
  • The Borrower shall immediately notify and update both Canara Bank IBU GIFT City /DIFC Dubai branch and the respective Canara Bank domestic branch regarding any changes to their personal circumstances, including but not limited to their official communication address, latest passport copy and residence status during the tenor of the loan.
  • Income tax exempted.
  • Freely convertible.
  • No exchange loss.
  • Flexible tenure from 1 year to 5 year.
  • Available in USD, GBP, EUR, CAD & AUD.
  • Loan against deposit available.
  • Nomination available.
  • Joint Account available.

Therefore, if you are looking for an option to save your money in foreign denominations, FCNR Accounts are an excellent choice.

 

NOSTRO Details:

  • Compounding of interest in FCNR Term Deposit at half yearly interval.
  • FCNR Accounts are Term Deposit Accounts and not a Savings Account. Premature withdrawal is allowed but Interest is paid only post completion of 1 year.
  • You can open an FCNR Account by transferring money from your existing Non-Resident External NRE A/C or remittance from abroad.
  • The interest you earn on your deposits on FCNR Accounts is tax-free, e., it is not taxable in India.
  • The Principal amount of your FCNR deposit and the interest you earn thereon is fully repatriable, e., it is completely transferable.
  • You can also avail loan over your FCNR Term Deposit Account.
  • Account opening form - IF (GEN) 1845pdf icon (.pdf - 244.17 KB)
  • ID Proof - Photocopy of Valid Passport/ OCI-PIO Card.
  • ID Proof – PAN Card/ Form 60 (in absence of PAN).
  • Proof of NRI Status - Copy of valid visa/ work permit / OCI/PIO.
  • Address Proof.
  • photographs.
  • FATCA declaration.
  • Calculation of interest is on the basis of 360 days to a year.
  • Only one-time automatic renewal facility of FCNR (B) deposits is available.
  • Renewal of Overdue deposit will be done as per term and condition of the Bank.
  • If overdue FCNR is not renewed with three year of maturity, the amount will be crystallised. (the balances lying in the foreign currency denominated deposit into Indian Rupee at the exchange rate prevailing as on that date).
  • Where the FCNR(B) deposit is to be closed before maturity before completion of the minimum period of deposit i.e. one year from the effective date of deposit, no interest is payable on such prematurely closed deposit.
  • Other Terms and conditions of the Bank as applicable on FCNR Deposit. For more details, please visit your nearest branch.

FCNR (B) DEPOSITS - APPLICABLE RATE OF INTEREST FOR CLOSURE BEFORE MATURITY

If the FCNR(B) deposit is closed before maturity prior to completion of the minimum period of deposit i.e., one year from the effective date of deposit, no interest is payable on such prematurely closed deposit.
For FCNR (B) Deposits opened/renewed prior to 19.11.2021:

if FCNR (B) deposit is closed before maturity on or after completion of the stipulated minimum period of deposit of 1 year, the rate of interest payable on such prematurely closed deposit shall be 1% less than the stipulated rate of interest applicable to FCNR (B) deposit for the period run, as ruling on the date of deposit.

If FCNR (B) deposit is closed before maturity on or after completion of the stipulated minimum period of deposit of 1 year, for reinvestment in FCNR (B) deposit in other permitted currencies (i.e., USD, GBP, EUR, AUD, CAD), the rate of interest payable on such prematurely closed deposit shall be 0.50% less than the rate applicable for the period run, as ruling on the date of FCNR (B) deposit.
For FCNR (B) Deposits opened/renewed on or after 19.11.2021: If FCNR (B) deposit is closed before maturity on or after completion of the stipulated minimum period of deposit of 1 year, the rate of interest payable on such prematurely closed deposit shall be the rate of interest applicable to FCNR (B) deposit for the period run, ruling as on the date of deposit or on the date of seeking premature withdrawal, whichever, is lower.
Contact Details E- Mail: nrihub@canarabank.com

Guidelines for calculation and payment of interest for the overdue period on FCNR (B)/RFC Term Deposits are as mentioned below:-

Overdue period (from the date of maturity till the date of renewal, both days inclusive) FCNR (B) Deposit RFC Term Deposit
Not exceeding 14 days

1. Overdue deposit or a portion thereof can be renewed from the date of maturity.

2. The rate of interest payable on the amount of the deposit so renewed shall be the appropriate rate of interest for the period of renewal as prevailing on the date of maturity or on the date of renewal, whichever is lower.

1. Overdue RFC Term Deposit can be renewed from the date of maturity at the interest rate prevailing on the date of maturity, provided the deposit is renewed to fall due after a period of not less than one month from the date of renewal.

2. In case of renewal of individual RFC Term Deposits of value USD 250,000 and above or equivalent in other currencies, minimum period of renewal can be one week beyond date of renewal.

3. Wherever the depositor opts to renew the deposit from the date of presentation to take advantage of enhanced interest rate prevailing on the date of presentation, same can be acceded to without payment of interest for the overdue period.
More than 14 days Simple interest at par with RFC SB rate for the respective currency prevailing on the date of renewal or the contracted rate of interest on the matured TD, whichever is lower.

In case a foreign currency denominated deposit with a fixed maturity date remains inoperative for a period of three years from the date of maturity of the deposit, at the end of the third year, the bank shall convert the balances lying in the foreign currency denominated deposit into Indian Rupee at the exchange rate prevailing as on that date. Thereafter, the depositor shall be entitled to claim either the said Indian Rupee proceeds and interest thereon, if any, or the foreign currency equivalent (calculated at the rate prevalent as on the date of payment) of the Indian Rupee proceeds of the original deposit and interest, if any, on such Indian Rupee proceeds.

If customer submits request for placement of such INR proceeds in term deposit, guidelines for payment of simple interest for overdue period of FCNR (B)/RFC deposit for the pre crystallization period of 3 years from the date of maturity are as follows:-

  • If the depositor is NRI on the date of renewal – Rate of Interest shall be simple interest at par with RFC SB rate for the respective currency prevailing on the date of renewal or the contracted rate of interest on the matured TD, whichever is lower.
  • If the depositor is resident on the date of renewal – Rate of Interest shall be RFC SB rate prevailing on the date of maturity or on the date of renewal, whichever is lower.
  • In cases where FCY deposits are crystallized, customer is entitled for the simple interest at ongoing SB rate on the INR component for the post crystallization period irrespective of the fact whether customer opts for renewal or withdrawal.

Important Points

  • In cases where deposit is overdue for more than 14 days, renewal from date of maturity is not permitted. If customer requests the Bank for renewal of such overdue deposit, the same shall be acceded to by treating it as a fresh term deposit at the interest rate prevailing on the date of renewal for the period of fresh term deposit.
  • In case where deposit is not renewed for minimum maturity period, no interest for the overdue period for which it remained in FCY shall be paid.
  • In case, where only a portion of the overdue deposit is renewed, interest for the overdue period shall be paid on the amount so placed.
  • If, after renewal, the deposit is withdrawn before completion of the minimum stipulated period, interest paid for the overdue period i.e. period beyond the original date of maturity of earlier deposit shall be recovered.
  • In case where deposit is crystallized, for determining interest rate for overdue period (pre-crystallization), customer’s residential status as on the date of renewal shall be reckoned.

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01-04-2026 01:15 AM

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