UNIVERSITY OF MUMBAI

PROJECT REPORT ON

“NRE NRI & FCNR A/C WITH REFERANCE TO THE SHAMRAO VITHAL CO-OPERATIVE BANK LTD ”

T.Y.B.B&I (SEMESTER V)

ACADEMIC YEAR: 2011 – 2012

SUBMITTED BY

……………….

ROLL NO –………………..

PROJECT GUIDE

PROF………………..

S.I.W.S

N.R SWAMY COLLEGE OF COMMERCE & ECONOMICS

SMT. THIRUMALAI COLLEGE OF SCIENCE

337, SEWREE – WADALA ESTATE,

WADALA, MUMBAI – 400 031.

PROJECT REPORT ON

“ NRE, NRI & FCNR A\C WITH REFERANCE TO THE SHAMRAO VITHAL CO-OPERATIVE BANK LTD”

SUBMITTED

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF DEGREE OF

B.COM – BANKING & INSURANCE

………………..

ROLL NO – ……………….

T.Y.BBI (SEMESTER V)

S.I.W.S

N.R SWAMY COLLEGE OF COMMERCE & ECONOMICS

SMT. THIRUMALAI COLLEGE OF SCIENCE

337, SEWREE – WADALA ESTATE,

WADALA, MUMBAI – 400 031.

CERTIFICATE

NAAC ACCREDITED B++

This is to certify that, Mr./Miss__________________________________

Of T.Y.B.B.I Semester V (2011-12) has successfully completed project

on__________________________________________

___________________________________________________________

Under the guidance of _________________________________________

_______________________ ___________________________

(Signature of Project Guide) (Signature of Principal)

_______________________ ___________________________

(Signature of Coordinator) (Signature of External Examiner)

DECLARATION

I Mr./Miss _________________________________________ the student of S.I.W.S N.R Swamy College of Commerce & Economics, studying in T.Y. B.Com – Banking & Insurance ( Semester V), hereby declare that I have completed the project report on “NRE NRI & FCNR A\C WITH REFERANCE THE SHAMRAO VITHAL CO-OPERATIVE BANK LTD.’’

The information submitted is genuine and practical to the best of my knowledge.

Date: ________________ __________________

…………………

Place: Mumbai (Roll No-………………)

EXECUTIVE SUMMARY OF THE PROJECT

After liberalization the Indian banking sector developed very appreciate.
The RBI also nationalized good amount of commercial banks proving socio
economic services to the people of the nation. The public Sector banks have
shown very good performance as far as the financial operations are concerned.
If we look to the glance of the financial operation, We may find that deposit of public to the public sector Banks have increased from 859, 461, 95 core to 1,079, 393, 81 core in 2003, the investments of the public sector Banks have increased from 349,107.81 core to 545,509.00 core, and however the advances have also been increased to 549,351.16crore from 414,989.36crore in2003. The total income of the public sector banks has also shown good performance since the last few years and currently it is 128,464.40crore.The

Public sector Banks have also shown comparatively good result. The gross
profits of the public sector Banks Currently29, 715,26crore which has been
doubled to the last to last year, and the net profit Of the public sector Banks is12, 295,47crore.However, the only problem of the public sector Banks these days are the Increasing level of the non performing assets. The only problem that hampers the possible financial performance of the public Sector Banks is the increasing results of the non performing assets. The non performing assets impacts drastically to the working of the banks .The efficiency of a bank is not always reflected only by the size of its Balance sheet but buy the level of return on its assets. NRE, NRI & FCNR A\C banking do not generate interest income for its Bank, but at the same time banks are required to make provisions for such deposits from their current profits.

NRE NRI & FCNR A\C banking have deleterious effect on the return on assets in several ways:-

(1) They erode current profits through provisioning requirements(2)They result in reduced interest income

(2) They require higher providing requirements affecting profits and

Accretion to Capital funds recycling of funds.

The RBI has also tried to develop many schemes and tools to reduce the
non Performing assets the results are not up to the expectations. Before lending the banks must evaluate the feasible financial and operational prospective results of the borrowing companies by keeping in Considerations the overall impacts all the factors that influence the business.

This report deals with understanding the concept of core baking, its magnitude and major causes for an account becoming non-performing, projection with special reference to SBI bank.

ACKNOWLEDMENT

A project is the fruit of experiment and experience and it goes a long way to modeling a person and gaining a new insight in that field of research.

In this rewarding experience, one recognizes the help and support rendered by kind heart behind its success.

I would take this opportunity to thank all my teachers, especially Prof.veena prasad, the co-ordinator of B.Com (Banking & Insurance). I would like to thank Prof. Vinod Nayak , my project guide, who sincerely guided and supported me in doing the project. I would also like to thank the Managers of SVC , who has given me the relevant information on the topic.

I would also like to show my gratitude towards my family, friends and all others who have helped and supported me in doing the project.

Date: VIDYA JAGGLI Place: Roll no.25017

INDEX

Chapter No.		Topic
1	1.1 1.2 1.3	INTRODUCTION TO STUDY What is NRE, NRI & FCNR A\C Causes of NRE,NRI & FCNRA\C Types of NRE,NRI & FCNR A\C
2		OBJECTIVE OF STUDY.
3		More Information On Remittances With respect to SBI `

4	5.1 5.2 5.3 5.4 5.5 5.6 5.7	RBI BANK Some Basics Currency Management Currency Issues Soiled and Mutilated Banknotes Banknotes since independence Counterfiets Clean note policy Case study
6		Conclusion

CHAPTER NO.1

1.1 A. Non-Resident (Ordinary) Rupee Account (NRO Account)

NRO accounts may be opened / maintained in the form of current, savings, recurring or fixed deposit accounts.

Savings Account - Normally maintained for crediting legitimate dues /earnings / income such as dividends, interest etc.The interest rates on NRO Savings deposits shall be at the rate applicable to domestic savings deposits. Currently the interest rate is 3.5 per cent.
Term Deposits - Banks are free to determine the interest rates.
Account should be denominated in Indian Rupees.
Permissible credits to NRO account are transfers from rupee accounts of non-resident banks, remittances received in permitted currency from outside India through normal banking channels, permitted currency tendered by account holder during his temporary visit to India, legitimate dues in India of the account holder like current income like rent, dividend, pension, interest, etc., sale proceeds of assets including immovable property acquired out of rupee/foreign currency funds or by way of legacy/ inheritance.
Eligible debits such as all local payments in rupees including payments for investments as specified by the Reserve Bank and remittance outside India of current income like rent, dividend, pension, interest, etc., net of applicable taxes, of the account holder.
NRI/PIO may remit from the balances held in NRO account an amount not exceeding USD one million per financial year, subject to payment of applicable taxes
The limit of USD 1 million per financial year includes sale proceeds of immovable properties held by NRIs/PIO.
The accounts may be held jointly with residents and / or with non-resident Indian.
The NRO account holder may opt for nomination facility.
NRO (current/savings) account can also be opened by a foreign national of non-Indian origin visiting India, with funds remitted from outside India through banking channel or by sale of foreign exchange brought by him to India. The details of this facility are given in the FAQs on “Accounts opened by Foreign Nationals and Foreign Tourists” available on the RBI website.
Loans to non-resident account holders and to third parties may be granted in Rupees by Authorized Dealer / bank against the security of fixed deposits subject to certain terms and conditions.

B. Non-Resident (External) Rupee Account (NRE Account)

NRE account may be in the form of savings, current, recurring or fixed deposit accounts. Such accounts can be opened only by the non-resident himself and not through the holder of the power of attorney.
NRE accounts cannot be held jointly with residents
Account will be maintained in Indian Rupees.
Balances held in the NRE account are freely repatriable.
Accrued interest income and balances held in NRE accounts are exempt from Income tax and Wealth tax, respectively.
Authorised dealers/authorised banks may at their discretion/commercial judgement allow for a period of not more than two weeks, overdrawings in NRE savings bank accounts, up to a limit of Rs.50,000 subject to the condition that such overdrawings together with the interest payable thereon are cleared/repaid within a period of two weeks, out of inward remittances through normal banking channels or by transfer of funds from other NRE/FCNR accounts.
Savings - The interest rates on NRE Savings deposits shall be at the rate applicable to domestic savings deposits. Currently the interest rate is 3.5%.
Term deposits – The interest rates are stipulated by the Department of Banking Operations and Development, Reserve Bank of India. At present, with effect from the close of business in India on November 15, 2008, interest rates on NRE deposits for one to three years should not exceed the LIBOR/SWAP rates plus 175 basis points, as on the last working day of the previous month, for US dollar of corresponding maturities.

The interest rates as determined above for three year deposits will also be applicable in case the maturity period exceeds three years.
Permissible credits to NRE account are inward remittance to India in permitted currency, proceeds of account payee cheques, demand drafts / bankers' cheques, issued against encashment of foreign currency, where the instruments issued to the NRE account holder are supported by encashment certificate issued by AD Category-I / Category-II, transfers from other NRE / FCNR accounts, interest accruing on the funds held in such accounts, interest on Government securities/dividends on units of mutual funds purchased by debit to the NRE/FCNR(B) account of the holder, certain types of refunds, etc.
Eligible debits are local disbursements, transfer to other NRE / FCNR accounts of person eligible to open such accounts, remittance outside India, investments in shares / securities/commercial paper of an Indian company, etc.
Loans up to Rs.100 lakh can be extended against security of funds held in NRE Account either to the depositors or third parties.
Such accounts can be operated through power of attorney in favour of residents for limited purpose of withdrawal of local payments or remittances through normal banking channels to the account holder himself.

C. Foreign Currency Non Resident (Bank) Account – FCNR (B) Account

· FCNR (B) accounts are only in the form of term deposits of 1 to 5 years

All debits / credits permissible in respect of NRE accounts are permissible in FCNR (B) accounts also.
Account can be in Pound Sterling, US Dollar, Japanese Yen, Euro, Canadian Dollar and Australian Dollar
In case the depositor with any convertible currency other than designated currency desires to place a deposit in these accounts, authorised dealers may undertake with the depositor a fully covered swap in that currency against the desired designated currency. Such a swap may also be done between two designated currencies.
Loans up to Rs.100 lakh can be extended against security of funds held in FCNR(B) deposit either to the depositors or third parties.
The interest rates are stipulated by the Department of Banking Operations and Development, Reserve Bank of India. At present, in respect of FCNR (B) deposits of all maturities contracted effective from the close of business in India as on November 15, 2008, interest shall be paid within the ceiling rate of LIBOR / SWAP rates plus 100 basis points for the respective currency/corresponding maturities (as against LIBOR/SWAP rates plus 25 basis points effective from close of business on October 15, 2008).On floating rate deposits, interest shall be paid within the ceiling of SWAP rates for the respective currency / maturity plus 100 basis points. For floating rate deposits, the interest reset period shall be six months.
When an account holder becomes a person resident in India, deposits may be allowed to continue till maturity at the contracted rate of interest, if so desired by him.
Terms and conditions as applicable to NRE accounts in respect of joint accounts, repatriation of funds, opening account during temporary visit, operation by power of attorney, loans/overdrafts against security of funds held in accounts, shall apply mutatis mutandis to FCNR (B).

1.2 Want a Indian Bank Account..?

NRIs, NRE, and FCNR are allowed to open a bank accounts in India. You can only open an account with a banking entity that has been approved by the Reserve Bank of India. There has to be one of the following reasons to open a bank account in India (including savings bank account & NRE or NRO account). You need finances that are forwarded from abroad, You need foreign exchange that you have taken in from abroad or you need to have finances that you need to pay to them in India.

1.3 Types of Accounts available to Non Resident Indians - under NRI Banking Services:

NRE Account: NRE stands for nonresident external account. NRIs, PIOs, and OCBs are all able to get an NRE Account. The different ways to open this account would be either like a savings or fixed deposit. This account accepts all legal foreign exchange and transactions concerning other NRIs. You can get a balance report just like everyone else. You may transfer finances from one bank account to another if the name is the same on both of the accounts. This is the most common account used to cater NRI banking needs in India.

NRO Account: NRO stands for nonresident ordinary account. The different ways to open this account would be either like a savings or fixed deposit. You can get this account by sharing it with a resident of India. An NRO account is also given that name once an Indian citizen leaves the country on business or something of the sort. All of the interest income coming from an NRO account is taxable.

FCNR Account: FCNR stands for foreign currency nonresident accounts. NRIs, PIOs, and OCBs are all able to get an FCNR Account. Such account is available in Dollars, Pounds, Marks, Yen, and Euro. This type of account can be open for no longer than two years. All of the interest income coming from an FCNR account is eventually taxable. You can also use an FCNR account for paying off exports from India and for investing in India.

All the Indian bank accounts including NRI savings account can be operated over the internet, meaning all the Indian banks would offer its clients internet banking services. We would research out internet bank account in India for you that would offer the lowest & minimum account balance, or zero balance to be maintained.

http://www.nri-account.com/images/copy-ebooktrader.jpg

http://www.nri-account.com/images/small-pan-nri.jpg

CHAPTER NO.2

OBJCTIVE OF STUDY

Wanting to Invest in India..?

NRI-Account.com helps non resident Indians, people of India origin and overseas citizenship holders to invest in the Indian stock markets. Once your NRI account is setup you can trade Indian shares online, buy Indian mutual funds and perform intra day trading in Indian futures & options.

How to make Investments in India? NRI, NRI & FCNR can make investments in India. RBI & SEBI allows these categories of investors to invest in Indian stock markets, buy real estate in India, conduct trading in derivatives: futures and options, invest in mutual funds of India, make investments in government and RBI bonds. However in order to do such activities the SEBI has made the role of PAN card a must (Permanent Account Number). Get an account registered today to use the India's Investment climate to its best.

Who is an NRI – Non Resident India? NRI stands for a Non-Resident Indian. A non-resident Indian is an Indian or a citizen of India who lives outside of India. You are an Indian if you have ever had Indian passport, if you or your parents were ever citizens of India, or if you are a spouse of an Indian citizen. (Please be advised that India investment is now picking up)

NRI, NRI & FCNR have been given the privilege to use bank accounts via India banks, to invest your money in shares with Indian companies, and invest in property – real estate.

Want a Indian Bank Account..?

NRIs, PIOs, and OCIs are allowed to open a bank accounts in India. You can only open an account with a banking entity that has been approved by the Reserve Bank of India. There has to be one of the following reasons to open a bank account in India (including savings bank account & NRE or NRO account). You need finances that are forwarded from abroad, You need foreign exchange that you have taken in from abroad or you need to have finances that you need to pay to them in India.

Types of Accounts available to Non Resident Indians - under NRI Banking Services:

NRE Account: NRE stands for non resident external account. NRIs, PIOs, and OCBs are all able to get an NRE Account. The different ways to open this account would be either like a savings or fixed deposit. This account accepts all legal foreign exchange and transactions concerning other NRIs. You can get a balance report just like everyone else. You may transfer finances from one bank account to another if the name is the same on both of the accounts. This is the most common account used to cater NRI banking needs in India.

NRO Account: NRO stands for non resident ordinary account. The different ways to open this account would be either like a savings or fixed deposit. You can get this account by sharing it with a resident of India. An NRO account is also given that name once an Indian citizen leaves the country on business or something of the sort. All of the interest income coming from an NRO account is taxable..

FCNR Account: FCNR stands for foreign currency non resident accounts. NRIs, PIOs, and OCBs are all able to get an FCNR Account. Such account is available in Dollars, Pounds, Marks, Yen, and Euro. This type of account can be open for no longer than two years. All of the interest income coming from an FCNR account is eventually taxable. You can also use an FCNR account for paying off exports from India and for investing in India.

http://www.nriinvestindia.com/learntrading100.jpg

wanting to Trade Derivatives..!!

NRIs - Non Resident Indians including PIOs & OCIs can trade in the Derivatives Segment: Futures and Options of India, out of their Rupee funds held in India on non-repatriable basis (NRO). Through us NRIs can do online trading in trade futures & options in the Indian stock market.

So what exactly are futures - Derivative Trading in India?

A futures contract is nothing but a usual contract, the only difference being that you are buying or selling it at a certain date in the coming future and at a given specified price. Always keep in mind the following terms while making an agreement on a futures contract:

· Futures date: Delivery date or final settlement date

· Futures price: Pre-set price

· Settlement price: Price of the instrument on the delivery date

If you are an NRI and wish to trade in Indian futures online then kindly visit: www.FuturesTradingIndia.com

What is an Options contract?

In India an Options Contract is a type of Derivatives Contract which gives the buyer/holder of the contract the right (but not the obligation) to buy/sell the underlying asset at a predetermined price within or at end of a specified period. The buyer / holder of the option purchases the right from the seller/writer for a consideration which is called the premium. The seller/writer of an option is obligated to settle the option as per the terms of the contract when the buyer/holder exercises his right. The underlying asset could include securities, an index of prices of securities etc.

Want to Invest in India..?

NRI-Account guides non-resident Indians living abroad to invest in the Indian Stock Markets. We also assist PIOs & OCIs to apply for property loans, invest in mutual funds, buy Indian shares, trade in derivatives market, apply for a PAN card, get a NRI loan, open a NRI bank account and in opening up of an Online Demat account in India.

Start Investing in India.!!

If you are an Indian living abroad and want to make investments in Indian mutual funds or shares, then please use the form on the right hand side to get in contact with one of our investment advisers, and he will guide you about how you can go about investing in the Indian stock market online.

Some useful NRI related links:

NriPAN.com: Assists in applying for a PAN Card in India.

Investing-in.com: Resourceful blog on investments.

Demat-Account.com: Stock broker offering Demating Services.

NriInvestIndia.com: NRI focuses brokerage company from India.

NriFinanceGuide.com: Online news blog for the NRI community.

Learn-Trading: Learn how to Trade Indian Stocks online.

Futures Trading in India: Learn how to open Futures Account.

September 05, 2008

Repatriation Guidelines..A common doubt with most of my clients..Particularly Realty Investors

Repatriation is the transfer of funds from India to accounts held overseas. Repatriation pertaining to Real Estate in India is in accordance with the provision of the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2000 as defined in Sections 6 and 47 of FEMA, 1999 and Notification No. FEMA 21/2000-RB dated May 3, 2000.

Funds on which Repatriation is allowed in India:
If you are a Non-Resident Indian (NRI) or a Person of Indian Origin (PIO), you can avail of repatriation facility on:

 Sale proceeds of immovable property acquired in India out of your repatriable funds, without any lock-in period. Sale proceeds of immovable property bought from foreign currency.

 Assets acquired by way of Inheritance/legacy/bequest, without any lock-in period.

 Deposit with a bank or a firm or a company from funds brought from abroad.

 Provident fund balance or superannuation benefits.

 Amount of claim or maturity proceeds of insurance policy.

 Sale proceeds of shares, securities.

 Refund of application/earnest money/purchase consideration made by house-building agencies/seller on account of non-allotment of flats/plots/cancellation of booking/deals for purchase of residential/commercial properties along with interest and net of taxes, if original payment is made out of NRE/FCNR (B) account/inward remittances.

However, all persons, whether resident in India or outside India, who are citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, or Bhutan, require prior permission of Reserve Bank for transferring any immovable property in India.

Conditions for Repatriation of Sale Proceeds from property:

1. Property against which remittance is sought should be acquired as per the applicable laws and in accordance with the provisions of foreign exchange law in force.

2. Documentary evidence in support of the acquisition of the funds/assets proposed to be remitted should be produced. It is required by banks for the same.

3. Undertaking and Certification relating to tax compliance are mandatory.

4. Proceeds should not exceed the amount paid for acquiring the property.

5. Subject to fulfillment of few conditions, proceeds should be credited to NRE account.

6. Repatriation of sale proceeds of residential properties is restricted to two such properties.

7. Repatriation of sale proceeds of immovable property acquired out of Rupee fund (inward remittance) is available only if the property is held for a minimum period of 10 years. If such a property acquired out of Rupee fund is sold within 10 years, remittance can be made, only if the sale proceeds have been held by the NRI/PIO for the balance period in an NRO Account (Savings/Term Deposits) or in any other eligible security provided such investment is traced to the sale proceeds of the immovable property.

8. Repatriation should be done via 'authorised person'. Authorised person means an authorized dealer/offshore banking unit or any other person for the time being authorised to deal in foreign exchange or foreign securities, by the RBI.

9. Citizens of Pakistan, Bangladesh, Sri Lanka, China, Afghanistan, Iran, Nepal and Bhutan shall require prior approval from RBI to apply for repatriation.

NRI banking norms:
Repatriation of sales proceeds of an immovable property is allowed by banks, subject to fulfillment of the following points:

1. Sale proceeds of property purchased with native currency by an NRI do not qualify for repatriation.

2. Sale proceeds of property purchased with foreign currency qualifies for repatriation amount not exceeding $ I million, subject to two conditions:

o Remittance for the concerned property was done outside India, in accordance with regulation of FEMA, 1999.

o Property in question is registered with RBI within 3 months of purchase.

3. Real Estate acquired as gift by NRI qualifies for repatriation and can be repatriated to only NRO account held by him.

4. Inherited property can also be repatriated on producing proof of inheritance, undertaking by the remitter and a certificate from a Chartered Accountant. This is subject to RBI approval.

5. Property purchased on loan also falls under repatriable investment if the loan has either been repaid per norms or an undertaking by a Chartered Accountant is enclosed.

Channels of Repatriation
NRI Accounts:

 NRE (Non Resident External Account) account (Savings/Current/ Fixed Deposits): Is freely repatriable (principal and interest) and does not require prior permission from RBI. Many banks like HDFC, PNB, SBI, ICICI et al offer NRE facilities.

 FCNR (Foreign Currency Non Resident Account) (Deposits): FCNR Deposits are fully repatriable (principal and interest). And the entire deposit is exempt from tax. All major banks HDFC, ICICI, SBI offer this facility.

 NRO account Non- Resident Ordinary Account(Savings): NRO deposits are not repatriable (principal) except on current NRI income like rent, dividend, pension, etc. and remittances indicated under "Repatriation of NRO Funds" only after payment of taxes due in India. Interest is freely repatriable. The NRI may remit up to USD one million per calendar year.

 RFC account (Resident Foreign account): This account is available for returning Indians only, that is Indian who have permanently returned to India after holding NRI status. Funds can be repatriated on a need basis.

Repatriation Procedure:
To apply for repatriation, an NRI should make an application in the prescribed format to an authorized dealer only, that is, a bank/dealer authorised to deal in foreign exchange by the RBI. The authorized dealer on satisfying itself with the particulars/documents submitted by the concerned NRI may allow the repatriation of the same.

The documents required while seeking Repatriation:

1. Application for permission in prescribed format in Form IPI 8 to repatriate the original investment made in immovable property held in India.

2. Certified copy of the purchase agreement.

3. Certified copy of the sale agreement.

4. Original bank documents proving that the purchase has been made from abroad or from an NRE account held by the seller.

5. Proof of the Capital gain tax, if any, deducted at source and paid to the Government by the purchaser of the property.

October 17, 2011

Fate can be Fatal, but proper planning can still save you...Asset Protection Case Study

Gaurav was a fairly wealthy man. He had three beautiful adult children, all of whom were married to great partners. He himself had been married to the same women for 35 years. At the age of 57, Rupali, his still young and beautiful wife, had a car accident that disfigured her face so badly that even plastic surgery did very little to restore her once beautiful countenance.

Gaurav and Rupali were accustomed to a life that included socializing with what I call "the beautiful people." Some of Rupali’s friends were starlets and quite notable individuals. With the disfigurement resulting from the accident, she never seemed to feel comfortable in the same circles. Ruplai went into a deep depression over this and her Dr. put her on prescription medications for anxiety.

Unfortunately, her withdrawal from the social circles left her home with her feelings and she started turning to alcohol and eventually narcotics as an escape. She started herself in a cycle of being up and down, depending on how much of what substance she had in her. The only time she ventured out of the home was to make a trip to the drive-thru liquor store or to see her "dealer." This was devastating to Gaurav. He couldn't comfort her and she was spinning out of control.

Soon came another car accident - Rupali was inebriated, at fault, and she caused injuries to the other parties. With a DUIA charge under her belt, Gaurav, fearing that the worst was yet to come, set up an asset protection plan making their three children equal beneficiaries.

About eight months passed, Rupali had sought help for her substance abuse and was attending meetings and had been sober for almost six months. Even though her license had been suspended due to accident number two, she still drove to her meetings occasionally, whenever Gaurav or a friend couldn't drive her.

She still struggled with depression but was making what "seemed" like progress. Until one night on her way to a meeting, she decided instead to stop and get a single wine cooler. Tragically, this led to a four-hour relapse and ended in a third automobile accident and the bills soared, as well as the legal fees for her defense and the lawsuits from the victims and their insurance companies.

This story doesn't get any better.

Three months later, Gaurav left town on a business trip and Rupali, so deep in her guilt, shame, depression and loneliness, spent the next four days on a cocaine binge which ended in a cardiac arrest. Gaurav returned from his trip to find his once lovely wife sprawled out on the floor, drugs and paraphernalia scattered about their home.

Suspecting foul play, Gaurav immediately called the paramedics…but it was far too late. Once they pronounced Rupali dead, Gaurav called his oldest son to break the news. The next five hours or so must have been very difficult with the police swarming his home gathering evidence.

Sixteen hours later, when the first of his three children arrived at the house, Gaurav was also dead…his son found him in his study…with an empty bottle of his wife's prescription Klonopin, a half bottle of Kelt Petra "Tour du Monde" on the table in front of him and in his lap…a picture of him and Rupali on their 25th wedding anniversary trip.

This story made the local news and the media had a heyday with it… but none of the judgment creditors were able to access any of Gaurav’s wealth, nobody except his children, because he had set up an ironclad asset protection plan.

Summarising..
This is a story that is so tragic that it's hard to say there were any winners. This story does show the frailty and unpredictability of life. The ONLY positive thing here is that the children weren't further tortured by a long and arduous probate period or watching their parents estate be gobbled up by greedy litigants. The painful loss of both parents was excruciating enough for them.

Asset Protection – Case study

The company is a successful Delhi based home builder. Over the past few years, following many construction defect lawsuits, the firm found it more and more difficult to carry liability insurance. Coverage was just too expensive. Eventually, the decision was made to stop carrying insurance coverage altogether.

Without insurance coverage, the company-and possibly its owners-were exposed to future lawsuits. Asset protection for the company and its owners was the best alternative to insurance coverage.

The company's operations had to be restructured so that the liability arising out of any one building project would reach only a limited amount of the company's assets, if any. A separate legal entity was established for each construction project. Their protection was enhanced further by having different entities own the real estate and do the developments work.

An additional layer of entities further insulated the individual owners from the liabilities of the business. The ownership of the personal assets of the owners was further restructured.

In its first test, this protective structuring worked as planned-seeing the level of protection it faced, the plaintiff dropped a potential class action lawsuit and accepted a surprisingly low settlement offer.

FEMA - Rules

The Foreign Exchange Management Act, 1999 (FEMA) came into force with effect from June 1, 2000. With the introduction of the new Act in place of FERA, certain structural changes were brought in. The Act consolidates and amends the law relating to foreign exchange to facilitate external trade and payments, and to promote the orderly development and maintenance of foreign exchange in India.

From the NRI perspective, FEMA broadly covers all matters related to foreign exchange, investment avenues for NRIs such as immovable property, bank deposits, government bonds, investment in shares, units and other securities, and foreign direct investment in India.

FEMA vests with the Reserve Bank of India, the sole authority to grant general or special permission for all foreign exchange related activities mentioned above.

Section 2 - The Act here provides clarity on several definitions and terms used in the context of foreign exchange. Starting with the identification of the Non-resident Indian and Persons of Indian origin, it defines "foreign exchange" and "foreign security" in sections 2(n) and 2(o) respectively of the Act. It describes at length the foreign exchange facilities and where one can buy foreign exchange in India. FEMA defines an authorised dealer, and addresses the permissible exchange allowed for a business trip, for studies and medical treatment abroad, forex for foreign travel, the use of an international credit card, and remittance facility

Section 3 prohibits dealings in foreign exchange except through an authorised person. Similarly, without the prior approval of the RBI, no person can make any payment to any person resident outside India in any manner other than that prescribed by it. The Act restricts non-authorised persons from entering into any financial transaction in India as consideration for or in association with acquisition or creation or transfer of a right to acquire any asset outside India.

Section 4 restrains any person resident in India from acquiring, holding, owning, possessing or transferring any foreign exchange, foreign security or any immovable property situated outside India except as specifically provided in the Act.

Section 6 deals with capital account transactions. This section allows a person to draw or sell foreign exchange from or to an authorised person for a capital account transaction. RBI in consultation with the Central Government has issued various regulations on capital account transactions in terms of sub-sect ion (2) and (3) of section 6.

Section 7 covers the export of goods and services. All exporters are required to furnish to the RBI or any other authority, a declaration regarding full export value.

Section 8 puts the responsibility of repatriation on the persons resident in India who have any amount of foreign exchange due or accrued in their favour to get the same realised and repatriated to India within the specific period and in the manner specified by the RBI.

The duties and liabilities of the Authorised Dealers have been dealt with in Sections 10, 11 and 12, while Sections 13 to 15 cover penalties and enforcement of the orders of the Adjudicating Authority as well as the power to compound contraventions under the Act.

Sections 36 and 37 deal with the establishment of an Enforcement Directorate, and empowers it to investigate the violation of any provisions of the Act, rules, regulations, notifications, directions or order issued under this Act.

March 17, 2010

What investment options are available to NRI's for their repatriable corpus? How can we be of value to you..

Non Resident Indians can invest in Government Securities and Treasury Bills through a Primary Dealer. The same will be issued to Non Resident Indians in a dematerialized form, and Non Resident Indians have to establish to the primary dealer that the source of funds is external in order to allow Non Resident Indians to put the proceeds on maturity into an NRE account.
Non Resident Indians can purchase and redeem units of domestic Mutual Funds, by simply mentioning Non Resident Indians status as NRI in purchase form, and by issuing a cheque from Non Resident Indians NRE account. However, if Non Resident Indians invest in the Money Market Mutual Fund, they will not be permitted to repatriate proceeds of redemption.
Non Resident Indians are also permitted to invest in Bonds issued by public sector undertakings (PSUs) in India from Non Resident Indians NRE account and credit the proceeds back into the NRE account.
Non Resident Indians can purchase Shares, both in the Primary as well as the secondary market.
Primary Market
In the primary market, Non Resident Indians may invest either through an Initial Public Offer (IPO) of Public Limited companies, or in Public Sector Enterprises being dis-invested by the Government of India. This will be mentioned in the prospectus/application form and the company will have taken the approval to invite Non-resident funds.

Secondary Markets / On a stock exchange
Non Resident Indians are permitted to trade in shares listed on the Stock exchange under what is called the Portfolio Investment Scheme (PIS). Non Resident Indians will simply have to open a separate NRE savings and an NRE Demat account and obtain a permission (through us) to do so. We will guide and assist Non Resident Indians with the formalities.
Non Resident Indians are also entitled to place Non Resident Indians money in Deposits with Indian companies, non-banking finance companies registered with RBI, housing finance companies and other financial institutions. The company will have taken the permission for RBI to allow Non Resident Indians to invest, and will then make an appropriate mention / invitation to Non Resident Indians

CHAPTER NO. 3

CHAPTER NO. 3.

MORE INFORMATION ON REMITTEANDES

Instant Transfer
Online Remittances
Speed Remittance (SBI Express)
SWIFT / Wire Transfer
Draft / Cashier's Cheques
Foreign Currency Cheques

Instant Transfer:

"Instant Transfer is a real time rupee remittance facility from SBI branches in 32* countries across the world to your / beneficiary's account maintained with SBI in India at any of the over 19,100 Core Banking Branches of SBI or Associate Banks, as also to over 58,500 NEFT/ RTGS enabled branches of other banks in India."

* Australia, Bahrain, Belgium, Canada, China, France, Hong Kong, Israel, Japan, Maldives, Mauritius, Nepal, Oman, Singapore, South Africa, Sri Lanka**, Germany,Switzerland,UK and USA.

** Money shall be credited after one day.

By far the Fastest way to send remittance
Attractive Exchange Rates and low remittance charges
Facility also available to non-account holders (of our foreign branches) at certain centres

Charges for ‘Instant Transfer’ vary at different branches. Branches in some countries may offer the facility at concessional rates to their account holders. Please contact our branch in your Country to know the schedule of charges of ‘Instant Transfer’ for you.

Online Remittances

SBI EXPRESS REMIT US

An online service to remit money from USA to India from the comfort of your home / office any day / any time.
Only one-time Registration on https://remit.onlinesbi.com
Uses the US Automated Clearing House (ACH) network.
FREE money transfers directly credited into beneficiary accounts at over 13000 SBI Branches (Core Banking / networked Branches) all over India.
FREE money transfers above $ 500 into accounts of over 60000 designated branches of other Banks all over India through RTGS/ NEFT (nominal charges for lower amounts).
Online tracking of remittance request through every stage of the transaction.
You can remit up to US Dollars 10,000 through a single transaction to an account with SBI. In case of accounts with other banks, you can remit up to US Dollars 5,000 through a single transaction.
Money is received and processed in 5 working days.

Charges *

Given below is the present charges structure for all the USD remittances sent through SBI Express Remit US.

USD amount	Charges
USD amount	For beneficiary accounts in SBI and its associate Banks	For beneficiary accounts in other banks
Upto 500	No charges	Rs. 6
Above 500	No charges	No charges

* Foreign Currency Conversion charges of Rs. 25/- levied on every remittance.
* Service Tax for conversion of Foreign Currency to Indian Currency is applicable w.e.f. 1st April, 2011 as under:

1. 0.1% of the gross amount of currency exchanged for an amount of Rs. 1,00,000, subject to minimum of Rs. 25/- ; and

2. Rs. 100 and 0.05% of the gross amount of currency exchanged for an amount of rupees exceeding Rs 1,00,000 and up to Rs.10,00,000; and

3. Rs. 550 and 0.01% of the gross amount of currency exchanged for an amount of rupees exceeding Rs. 10,00,000; subject to a maximum amount of Rs. 5,000.

* Education cess @ 3% on service tax is also applicable for every transaction.

SBI Express Rapid Remittance

Online money transfer service for remitting funds from USA.
Money is receive and process in India on the next business day.
Minimum amount USD 2000, maximum amount USD 1,00,000.
Only one-time Registration on https://remit.onlinesbi.com
Online tracking of remittance request through every stage of the transaction.

Note

Your bank in USA should offer the following facilities for using our product.

Online third-party funds transfers/payments on their Internet banking website.
A "Remarks" or "Message to Recipient" field while making the online third-party transfer, to enter the Transaction Reference number generated by us.

SBI EXPRESS REMIT UK

An online service to remit money from your UK Bank account to the beneficiary in India.
Only one-time Registration on https://remit.onlinesbi.com
Uses the CIP (Customer Initiated Payments) mode to directly transfer money from remitter's UK bank account to beneficiary's account in India.
No need for any branch visits or paperwork. Remittance instructions can be posted 24 X 7.
Online Tracking of remittance request through every stage of the transaction.

Charges *

Given below is the present charges structure for all the GBP remittances sent through SBI Express Remit UK.

GBP amount	Fee for Direct Credit	Fee for Draft Issue & Courier	NEFT/ RTGS
50 – 500	No charges	Rs. 100	Rs. 100
Above 500	No charges	No charges	No charges

* Foreign Currency Conversion charges of Rs.25/- levied on every remittance.
* Service Tax for conversion of Foreign Currency to Indian Currency is applicable w.e.f. 1st April, 2011 as under:

1. 0.1% of the gross amount of currency exchanged for an amount of Rs.1,00,000, subject to minimum of Rs.25/- ; and

2. Rs. 100 and 0.05% of the gross amount of currency exchanged for an amount of rupees exceeding Rs. 1,00,000 and up to Rs. 10,00,000; and

3. Rs. 550 and 0.01% of the gross amount of currency exchanged for an amount of rupees exceeding Rs. 10,00,000; subject to a maximum amount of Rs. 5,000.

* Education cess @ 3% on service tax is also applicable for every transaction.
* The above charges structure is subject to change.

Speed Remittance (SBI Express):

SBI Express enables NRIs to send rupee remittances to India through Exchange Houses / Banks / our branches in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and UAE. The beneficiary in India can receive the remittance through any one of the following options:

Credit to his / her account held in any of over 13,000 SBI branches within 24 hours, and over 60,000 NEFT/ RTGS enabled branches of other banks in India by the end of the next working day.
For other beneficiaries, draft will be couriered by the next working day.

SWIFT / Wire Transfer:

International Remittance Centre (IRC)

The IRC speeds up the payment / processing of all personal retail forex inward remittances received through SWIFT MT 103. The remittance up to USD 10,000 or equivalent for personal/Individual customers can be credited to the beneficiary's account directly. For INR remittances there is no upper limit cap for personal/Individual customers.

Features

Beneficiary's account is credited through Core Banking within 1 business day of receipt of message.
Facilitates remittances from anywhere in the world to any part in India.
Other Banks' beneficiaries (having CBS account numbers) whose remittances are routed through SBI get credited through NEFT / RTGS / by latest next working day.
Remittance tracking facility through dedicated helpline.
Rs. 25/- per transaction is charged on the proceeds.
Service Tax for conversion of Foreign Currency to Indian Currency is applicable w.e.f. 1st April, 2011 as under:

1. 0.1% of the gross amount of currency exchanged for an amount of Rs. 1,00,000, subject to minimum of Rs. 25/- ; and

2. Rs. 100 and 0.05% of the gross amount of currency exchanged for an amount of rupees exceeding Rs. 1,00,000 and up to Rs.10,00,000; and

3. Rs. 550 and 0.01% of the gross amount of currency exchanged for an amount of rupees exceeding Rs.10,00,000; subject to a maximum amount of Rs.5,000.

Education cess @ 3% on service tax is also applicable for every transaction

For payments originating from EURO region to India

IBAN field is mandatory when the remittance is ordered from EURO region either through online mode or over the counter.
Please quote the CBS a/c no. only of the beneficiaries in IBAN field and avoid prefixing or suffixing SWIFT / IFSC Code etc.

	Telephone	Email	Time IST
IRC Help Line	+91-33-2288 2363 +91-33-2288 3778	ircresponse.fd@sbi.co.in irc.fd@sbi.co.in	10.00 to 17.00

NRIs can send remittances to India using SBI's foreign branches or a vast network of 490 correspondent banks across the globe. The remittance can be sent to the beneficiary's branch directly if it is a SWIFT linked branch. Please click on the following link to view the list of swift enabled branches with the SWIFT BIC code. Else, an NRI can select a SWIFT linked branch located close to the beneficiary's home town, which will handle the SWIFT transaction and transfer the funds to your beneficiary's account.

Draft / Cashier's Cheques:

Cashier's Cheque / International Money Order:

Remittance by cashier's cheque or international money order, works on the same principles as a cheque drawn on a foreign bank.

Draft:

If a remittance is sent as a demand draft, the beneficiary can deposit it at the branch in India, where the NRI or beneficiary holds an account. The draft will be sent to the branch where it is payable. After collection, the proceeds will be deposited in the account. If the remittance amount must be converted to INR, the exchange rate prevalent on the date of conversion will be applied. Collection charges will be as applicable from time to time.

Foreign Currency Cheques:

An NRI can deposit personal cheques drawn on a bank abroad in foreign currency and credit the same to his / her account with a branch in India. The cheques are sent to the respective countries for collection and on receipt of funds, the amount is deposited in the NRI's account. Collection period varies depending on the country, local clearing regulations and location of the bank on whom the cheque is drawn. Collection charges are recovered as applicable from time to time. Cheques can be deposited at the branch through messenger or sent to the branch by post / courier. If the cheque is in foreign currency and the credit must be offered in Indian rupees, the exchange rate prevailing on the date of conversion will be applicable.

Investments

India and the Indians have undergone a paradigm shift. There have been several fundamental and irreversible changes in the economy, government policies, outlook of business and industry, and in the mindset of Indians in general. India is today one of the fastest growing economies and is becoming one of the most lucrative investment destinations.
For NRIs, like you, who are constantly on the lookout for investment options, comfort levels have been high as far as India is concerned. We at State Bank of India, offer diversified investment opportunities to suit your risk appetite. You are backed by our financial expertise and over two centuries of banking experience. Please study each investment scheme independently and evaluate the repatriability of the investment

Loan

We offer several loan schemes to buy a car or home for your family back in India, or to tide over unforeseen financial needs.

You can leverage your future income, existing assets, FCNR deposits as security for the loan. To view details of our loan products, eligibility criteria, and repayment options use the right navigation links.

Eligibility to Open and Maintain FCNR A/c

With the exception of persons of Indian origin from Bangladesh and Pakistan, all NRIs and PIOs are eligible to maintain an FCNR account with an authorised bank in India.

Accounts may be opened with funds remitted from outside, existing NRE/ FCNR accounts, etc.
Remittances should be in the designated currency.
Conversion to currency other than the designated currency also permitted at the risk and cost of the remitter.

Features of FCNR Account

The account can be opened with funds remitted from abroad, or transferred from an existing NRE/FCNR account.
FCNR accounts can be opened with designated currencies, which are: GBP, USD, Deutsche Mark, Japanese Yen and the Euro.
Conversion to another designated currency is permitted at a cost to the account holder.
Only term deposits can be maintained in FCNR accounts, in a time range of 6 months to 3 years.

FCNR [ Foreign Currency Non-Resident (B) ]

Overview of FCNR Accounts:

Can be opened only by an NRI or jointly with other NRIs.
Nomination facility available (Nominee can be a resident Indian).
Deposits can be opened in US$, Euro, Sterling Pounds, Canadian Dollars, Australian Dollars and Japanese Yen.
Deposit can be made for a minimum of 1 year and a maximum of 5 years.
Minimum deposit USD 1000 or equivalent.
Both principal and interest are payable in foreign currency. Hence, there is no exchange loss on principal and interest.
Premature withdrawal is subject to a penal interest of 1%.
No interest is payable if the deposit is closed within a year.
Rupee loans can be taken in India against the security of the deposit.

By the depositor(s)
By third parties

Foreign currency loans can be availed at select SBI branches abroad against the security of FCNR deposits.
Interest earned on FCNR accounts is exempt from Indian income tax.

To open an FCNR account with a branch in India:

1. Fill up the account opening form and send it to the branch of your choice with the following documents:

o Two passport size photographs attested by you.

o Passport & Residence Visa / ID Card Copies duly attested by Banker / Notary Public / Indian Embassy / A person known to the bank.

o Initial remittance.

o Signature in the account opening form, verified by any one of the following persons / entities:

§ Indian Embassy / Consulate / High Commissioner.

§ Your bank abroad.

§ A person known to the bank.

§ Notary Public.

2. Enclosures (any two of the following):

o Cheque drawn on bank account abroad.

o Latest Overseas Bank statement in original.

o Copy of Telephone / Electricity Bill.

o Cancelled paid cheque of your overseas bank A/c.

o Copy of proof of drawing income / Employee ID / Labour Card.

Remittances

SBI offers remittances to India through multiple channels. Our remittance products are customized to suit your needs. You can select the mode of remittance based on the time within which you need to remit to India.

For information on remittances from US, UK, Canada and Middle East use the right navigation links.

September 10, 2008

Getting Started On Your Estate Plan by Steven Merkel,CFP®, ChFC - courtesy - investopedia

Estate planning is more than simply having a will. It is a continuplanning process done to alleviate the financial impact of your death on those you leave behind. By spending just a few hours and dollars now, you can save your loved ones or beneficiaries from paying as much as a 47% estate tax. But a well-constructed estate plan may not only reduce the tax bill, but also help your loved ones understand, resolve and prepare for many of the issues that arise when settling an estate. We'll show you where to start.

Dying without a Will - Dying without a will is known as dying intestate. If this were to happen in the U.S.intestate succession laws would come into play, and your relatives would have to go through probate to claim ownership of assets, perhaps even fight over assets. The state would determine how your property passes to your heirs. If no heirs fit the state's formula, your assets may become property of the state. A will can help you avoid the pitfalls of dying intestate; however, even if you have a will, your assets will still be subjected to the timely and costly probate process (court involvement).

How a Will Can Help
A will primarily allows you to control the distribution of your assets and state your final wishes.
One very important advantage of a will is that it allows you to recommend a guardian to care for your children or other dependent beneficiaries in the event of your death. Because this is an overwhelming responsibility, you should select your guardian(s) carefully and also obtain their consent before listing them in your will. Although the final decision concerning guardianship is made by the court, the courts give a lot of weight to the parent's decision in the will.

Other important items on your will are clauses clarifying the will and its purpose. In the exordium clause, for instance, you state your name and residence, and officially declare the document a will. Be careful to note in this clause that the will supersedes all previous wills, making them null and void. In the will you should also name the executor/administrator of your estate and how you would like that person to distribute your assets, including how all your debts, taxes and funeral expenses are to be paid. To avoid family disputes, you may want to add a non-contestability clause, which states that if any beneficiary contests the will, his or her share becomes null and void. Of course, a non-contestability clause is not suitable for every family's circumstance.

How to Start on Your Estate Planning
Now that you understand the importance of having a will, here's a list of steps that gives an overview of the estate planning process:

Make a list of all your assets and liabilities.

Open a family discussion of who should be the guardian for your children.

Check and update your current beneficiaries (those designated for IRAs, life insurance, etc).

Review the current federal estate tax exemption limits (discussed below).

Determine the distribution of your assets upon your death (family, charity, etc).

Discuss your funeral arrangements with your spouse or family.

Seek the assistance of a certified estate-planning attorney.

A simple will may cover all your estate planning needs if the value of your estate falls materially below the estate-tax exclusion amount. The federal estate tax is an excise tax levied on the transfer of a person's property that exceeds a certain amount at the time of that individual's death. If your estate is worth more than the tax exclusion amount, the tax can be hefty. As such, you really need to take a serious look at your personal situation, and, if your estate is more than the tax exclusion, look into more estate-reduction and planning techniques, which will help your beneficiaries avoid the estate tax (we discuss these techniques further below). Keep in mind that direct transfers to your spouse are not taxed - these assets are not taxed until s/he dies (this is called a marital deduction).

Estate-Reduction and Planning Options
Let's take a look at some estate-planning tools and estate-reduction techniques:

Use trusts to maximize the exclusion and avoid probate. Trusts help you do so because they are designated to a beneficiary.

Take advantage of charitable donations to reduce your estate.

Use your estate to pay family educational and medical expenses as these are tax deductible.

Loan assets to family members to minimize your estate.

Buy life insurance to help pay estate taxes, but remember life insurance will provide payouts only under certain conditions (executor or beneficiary should be owner).

Utilize annual gifting (up to $12,000 per person per year) to minimize taxes and maximize the value to your loved ones on your will.

Set up durable powers of attorney.

Establish your funeral and burial plans.

Seek professional help from your financial advisor, an estate-planning specialist or a lawyer specializing in estates.

Sometimes changes in your life - such as a sudden increase in wealth, a new marriage or remarriage, the birth of a child, a serious illness or a death in the family - can trigger the need for an estate plan evaluation. All of these factors could affect your current plan and require revisions or additions.

Summary
Estate planning is truly for the benefit and care of your loved ones, making the legal and financial issues easier to deal with if you pass away. Since planning for death is not always a No.1 priority, we tend to postpone setting up the legal documents. But at a minimum, every competent adult should have a will drafted. The problems associated with probate, creditors, con artists, lawsuits, lawyers and death taxes can all prolong the settlement of your estate. Don't wait to establish your plan until you've heard someone else's horror stories.

by Steven Merkel
Steven T. Merkel, CFP®:, ChFC, is the vice president of portfolio management for Financial Advisory Consultants LLC in Naples, Fla. Steve is a former U.S. Army air defense artillery officer and has been giving financial advice for more than 12 years. He is a Certified Financial Planner® practitioner and a Chartered Financial Consultant. Merkel has been featured and widely quoted in numerous publications including The New York Times, BusinessWeek, Entrepreneur, Consumer Reports, Investment News, Financial Planning Magazine and Fidelity's Stages Quarterly. He enjoys fishing, golf, military history, Miami Hurricane football and relaxing on the beaches of South Florida

Reverse Mortgage Demystified

A type of mortgage in which homeowners can borrow money against the value of his or her home. No repayment of the mortgage (principal or interest) is required until the borrower dies or the home is sold. After accounting for the initial mortgage amount, the rate at which interest accrues, the length of the loan and rate of home price appreciation, the transaction is structured so that the loan amount will not exceed the value of the home over the life of the loan.

Often, the lender will require that there can be no other liens against the home. Any existing liens must be paid off with the proceeds of the reverse mortgage.

A reverse mortgage provides income that people can tap into for their retirement. The advantage of a reverse mortgage is that the borrower's credit is not relevant, and is often unchecked, because the borrower does not need to make any payments. Because the home serves as collateral, it must be sold in order to repay the mortgage when the borrower dies (in some cases, the heirs have the option of repaying the mortgage without selling the home). These types of mortgages have large origination costs relative to other types of mortgages. These costs become part of the initial loan balance and accrue interest. Senior citizen borrowers with good credit should carefully analyze the options of a more traditional mortgage, such as a home equity loan, against a reverse mortgage.

September 28, 2009

NRI Income in India

NRI Income in India All income earned by NRIs in India is taxable and returns are to be filed every year. Under Section 9 (I) (ii) of the IT Act, salary earned in India is chargeable to tax. Under Section 115G of the IT Act, it is not mandatory for a non-resident Indian to file returns if the tax on his Indian income constituting investment income and long term gains has been deducted at source

Resident Indian earning income on short-time assignments abroad

As a ‘resident’ Indian, not having met the eligibility status of NRI, tax is payable.
A deduction of 75% can be applied for within 6 months of the end of the financial year under Section 80RRA by technicians. The rest of the allowance is taxed at a marginal rate. Technicians include individuals working on construction/manufacturing/mining/power generation etc; agricultural activities; public administration and business management; accountancy; applied sciences and social sciences

CHAPTER NO. 4

Your Guide to Money Matters

Money as a means of payment, consists of coins, paper money and withdrawable bank deposits. Today, credit cards and electronic cash form an important component of the payment system. For a common person though, money simply means currency and coins. This is so because in India, the payment system, especially for retail transactions still revolves mainly around currency and coins. Here is an attempt to answer some of the Frequently Asked Questions on Indian Currency.

5.1 Some Basics

History of Coins / currency:

I. Coins

The first documented coinage seems to have started with 'Punch Marked' coins issued between the 7th-6th Century BC and 1st Century AD. The coinage can be classified into the following periods:

a. Ancient

b. Medival

c. Mughal

d. Late pre-colonial

e. British India

f. Republic India

g. Others.

India won its independence on August 15, 1947. During the period of transition India retained the monetary system and the currency and coinage of the earlier period. India brought out its distinctive coins on 15th August, 1950.

Coins in India are presently being issued in denominations of 25 paise, 50 paise, one rupee, two rupees and five rupees. Coins upto 50 paise are called 'small coins' and coins of Rupee one and above are called 'Rupee Coins'. Coins can be issued up to the denomination of Rs.1000 as per the Coinage Act, 1906.

II. Currency:

Financial Instruments and 'Hundies' in India have a venerable history. Paper Money, in the modern sense, traces its origins to the late eighteenth century with the issues of private banks as well as those of semi-government banks. The Paper Currency Act of 1861 conferred upon Government of India the monopoly of Note Issue bringing to end banknote issues of Private and Presidency Banks. Government of India continued to issue currency notes till the Reserve Bank of India (RBI) was established on 1st April, 1935. Reserve Bank issued banknotes in January 1938 when the first Five Rupee banknote was issued bearing the portrait of George VI. This was followed by Rs. 10 in February, Rs. 100 in March and Rs. 1,000 and Rs. 10,000 in June 1938. The George VI series continued till 1947 and thereafter as a frozen series till 1950 when post independence banknotes were issued, with the Ashoka Pillar watermark.

Banknotes in the Mahatma Gandhi Series were introduced in 1996 and were issued in a phased manner in the denominations of Rs.5, Rs.10, Rs.20, Rs.50, Rs.100, Rs.500 and Rs.1000.

Banknotes in MG series 2005, in the denomination of Rs.10, Rs.20, Rs.50, Rs.100 Rs.500, and Rs.1000 with additional / new security features are presently being issued.

What is the Indian currency called?

The Indian currency is called the Indian Rupee (INR) and the coins are called paise. One Rupee consists of 100 paise.

What are the present denominations of banknotes in India?

At present, banknotes in India are issued in the denomination of Rs.10, Rs.20, Rs.50, Rs.100, Rs.500 and Rs.1000. These notes are called banknotes as they are issued by the Reserve Bank of India (Reserve Bank). The printing of notes in the denominations of Re.1, Rs. 2 and Rs.5 has been discontinued as these denominations have been coinised. However, such banknotes issued earlier can still be found in circulation and these banknotes continue to be legal tender.

Can banknotes and coins be issued only in these denominations?

Not necessarily. The Reserve Bank can also issue banknotes in the denominations of five thousand rupees and ten thousand rupees, or any other denomination that the Central Government may specify. There cannot, though, be banknotes in denominations higher than ten thousand rupees in terms of the current provisions of the Reserve Bank of India of Act, 1934. Coins can be issued up to the denomination of Rs.1000.

Demonetization of higher denomination banknotes.

Rs. 1000 and Rs.10000 banknotes, which were then in circulation were demonetized in January 1946, primarily to curb unaccounted money. The higher denomination banknotes in Rs.1000, Rs.5000 and Rs.10000 were reintroduced in the year 1954, and these banknotes (Rs.1000, Rs.5000 and Rs.10000) were again demonetized in January 1978.

What are the present available denominations of coins in circulation in India?

Presently 25 paise, 50 paise, one rupee, two rupees and five rupee coins are being issued. Coins up to 50 paise are called 'small coins' and coins of Rupee one and above are called 'Rupee Coins'. Though the coins in the denomination of 1 paise, 2 paise, 3 paise, 5 paise, 10 paise and 20 paise may still be in circulation, due to lack of demand these coins are not being issued.

What is legal tender?

The coins issued under the authority of Section 6 of The Coinage Act, 1906, shall be legal tender in payment or on account i.e. provided that a coin has not been defaced and has not lost weight so as to be less than such weight as may be prescribed in its
case: - (a) coin of any denomination not lower than one rupee shall be legal tender for any sum, (b) half rupee coin shall be legal tender for any sum not exceeding ten rupees, (c) any other coin shall be legal tender for any sum not exceeding one rupee [Section 13 of The Coinage Act, 1906].

Similarly, the One Rupee notes issued under the Currency Ordinance, 1940 are also legal tender and included in the expression Rupee coin for all the purposes of the Reserve Bank of India Act, 1934.

Every banknote issued by Reserve Bank of India (Rs.2, Rs.5, Rs.10, Rs.20, Rs.50, Rs.100, Rs.500 and Rs.1000) shall be legal tender at any place in India in payment or on account for the amount expressed therein, and shall be guaranteed by the Central Government, subject to provisions of sub-section (2) Section 26 of RBI Act, 1934.

What is the meaning of "I promise to pay" clause?

As per Section 26 of Reserve Bank of India Act, 1934, the Bank is liable to pay the value of banknote. This is payable on demand by RBI, being the issuer. The Bank's obligation to pay the value of banknote does not arise out of a contract but out of statutory provisions.

The promissory clause printed on the banknotes i.e., "I promise to pay the bearer an amount of X" is a statement which means that the banknote is a legal tender for X amount. The obligation on the part of the Bank is to exchange a banknote for coins of an equivalent amount.

Why is One Rupee liability of the Government of India?

The Government of India derives authority to issue Rupee coins from the Coinage Act. As such the rupee coins issued by Government constitute the liabilities of the Government.

5.2 Currency Management.

What is the role of the Reserve Bank of India in currency management?

The Reserve Bank derives its role in currency management from the Reserve Bank of India Act, 1934.The Reserve Bank manages currency in India. The Government, on the advice of the Reserve Bank, decides on various denominations of banknotes to be issued. The Reserve Bank also co-ordinates with the Government in the designing of banknotes, including the security features. The Reserve Bank estimates the quantity of banknotes that are likely to be needed denomination-wise and accordingly, places indent with the various printing presses. Banknotes received from banks and currency chests are examined and those fit for circulation are reissued and the others (soiled and mutilated) are destroyed so as to maintain the quality of banknotes in circulation.

What is the role of Government of India?

In terms of Section 25 of RBI Act, 1934 the design of banknotes is required to be approved by the Central Government on the recommendations of the Central Board of the Reserve Bank of India. The responsibility for coinage vests with the Government of India on the basis of the Coinage Act, 1906 as amended from time to time. The Government of India also attends to the designing and minting of coins in various denominations.

Who decides on the volume and value of banknotes to be printed and on what basis?

The Reserve Bank decides the volume and value of banknotes to be printed each year. The quantum of banknotes that needs to be printed, broadly depends on the requirement for meeting the demand for banknotes due to inflation, GDP growth, replacement of soiled banknotes and reserve stock requirements.

Who decides on the quantity of coins to be minted?

The Government of India decides the quantity of coins to be minted on the basis of indents received from the Reserve Bank.

How does the Reserve Bank estimate the demand for banknotes?

The Reserve Bank estimates the demand for banknotes on the basis of the growth rate of the economy, the replacement demand and reserve stock requirements by using statistical models/techniques.

How does the Reserve Bank reach the currency to people?

The Reserve Bank presently manages the currency operations through its 18 Issue offices located at Ahmedabad, Bangalore, Belapur, Bhopal, Bhubaneswar, Chandigarh, Chennai, Guwahati, Hyderabad, Jaipur, Jammu, Kanpur, Kolkata, Mumbai, Nagpur, New Delhi, Patna, Thiruvananthapuram, one sub-office at Lucknow, a currency chest at Kochi and a wide net work of currency chests. These offices receive fresh banknotes from the banknote printing presses. The Issue Offices of RBI send fresh banknote remittances to the designated branches of commercial banks.

The Reserve Bank offices located at Hyderabad, Kolkata, Mumbai and New Delhi (Mint linked Offices) initially receive the coins from the mints. These offices then send them to the other offices of the Reserve Bank. The banknotes and rupee coins are stocked at the currency chests and small coins at the small coin depots. The bank branches receive the banknotes and coins from the Currency Chests and Small Coin Depots for further distribution among the public.

What is a currency chest?

To facilitate the distribution of banknotes and rupee coins, the Reserve Bank has authorised select branches of scheduled banks to establish Currency Chests. These are actually storehouses where banknotes and rupee coins are stocked on behalf of the Reserve Bank. As on June 30, 2006, there were 4428 Currency Chests and 4102 Small Coin Depots. The currency chest branches are expected to distribute banknotes and rupee coins to other bank branches in their area of operation.

What is a small coin depot?

Some bank branches are also authorised to establish Small Coin Depots to stock small coins. The Small Coin Depots also distribute small coins to other bank branches in their area of operation.

What happens when the banknotes and coins return from circulation?

Banknotes and coins returned from circulation are deposited at the Issue offices of the Reserve Bank. The Reserve Bank subjects these to processing, authenticates banknotes for their genuineness, segregates them into notes fit for reissue and those which are not, for cancellation. The banknotes which are fit for reissue are sent back in circulation and those which are unfit for reissue are destroyed by way of shredding after completion of examination process. Similarly, coins received back from circulation are either reissued or are sent to the Mints for melting.

From where can the general public obtain banknotes and coins?

Banknotes and coins can be obtained in exchange at any of the offices of the Reserve Bank and at all the designated branches of banks.

5.3 Current Issues

Is there a way to reduce dependence on cash?

Cash continues to be the predominant payment means of transactions in India. A compositional shift is underway in the form of a gradual replacement of lower denomination banknotes by higher denomination banknotes, particularly Rs.100 and Rs.500. Instruments such as cheques, credit and debit cards, electronic funds transfer are at present supplementing the use of banknotes and as the use of these gains popularity, the growth rate of the demand for currency is expected to slow down.

Steps taken to increase the supply of banknotes and coins.

Several steps have been taken to augment the supply of banknotes and coins. Some of these are:

The existing banknote printing presses and the mints owned by the Government have been modernised.
Bharatiya Reserve Bank Note Mudran (P) Ltd., was set up as a fully owned subsidiary of the Reserve Bank of India on February 03, 1995. Under its aegis two banknote printing presses with the state-of-the-art technology, one each at Mysore (Karnataka) and Salboni (West Bengal), commenced production from June 01, 1996 and December 11, 1996, respectively.
To bridge the demand-supply gap, the Government had, as a one-time measure, imported banknotes, in the year 1997-98.
Government of India had also imported rupee coins during 2000-2003 to supplement the supply of coins from the four mints. The overall position of both banknote and coin supply is comfortable now.
The Regional Offices of RBI launched aggressive campaigns for providing exchange facility to the members of public.

Why are Re.1, Rs.2, Rs.5 banknotes not being printed?

Volume-wise, the share of such small denomination banknotes in the total banknotes in circulation was very high but in terms of value they constituted a very small percentage. The average life of these banknotes was found to be less than a year. The cost of printing and servicing these banknotes was, thus, not commensurate with their life, and printing of these banknotes was, therefore, discontinued. These denominations were coinised. However, Rs.5 was re-introduced in 2001 to supplement the gap between the demand and supply of coins in this denomination. The printing of Rs.5 banknotes has been discontinued from the year 2005.

5.4 Soiled and Mutilated Banknotes

What are soiled, mutilated and imperfect banknotes?

(i) "soiled note:" means a note which, has become dirty due to usage and also includes a two piece note pasted together wherein both the pieces presented belong to the same note, and form the entire note.

(ii) Mutilated banknote is a banknote, of which a portion is missing or which is composed of more than two pieces.

(iii) Imperfect banknote means any banknote, which is wholly or partially, obliterated, shrunk, washed, altered or indecipherable but does not include a mutilated banknote.

Can soiled and mutilated banknotes be exchanged for value?

Yes. Such banknotes can be exchanged for value.

Where are soiled/mutilated banknotes accepted for exchange?

All banks are authorized to accept soiled banknotes for full value. They are expected to extend the facility of exchange of soiled notes even to non-customers. All currency chest branches of commercial banks are authorised to adjudicate mutilated banknotes and pay value for these, in terms of the Reserve Bank of India (Note Refund) Rules, 2009

How much value would one get in exchange of soiled banknotes?

Soiled banknotes are exchanged for full value.

How much value would one get in exchange of mutilated banknotes?

A mutilated banknote can be exchanged for full value if,

(i) For denominations of Re. 1, Rs. 2, Rs. 5, Rs. 10 and Rs. 20, the area of the single largest undivided piece of the note presented is more than 50 percent of the area of respective denomination, rounded off to the next complete square centimeter.

(ii) For denominations of Rs. 50, Rs.100, Rs. 500 and Rs. 1000, the area of the single largest undivided piece of the note presented is more than 65 percent of the area of respective denomination, rounded off to the next complete square centimetre.

Banknotes in denominations of Re. 1, Rs. 2, Rs. 5, Rs. 10 and Rs. 20, cannot be exchanged for half value.

A mutilated banknote in denominations of Rs.50, Rs.100, Rs.500 or Rs.1000, can be exchanged for half value if,

The undivided area of the single largest piece of the note presented is equal to or more than 40 percent and less than or equal to 65 percent of the area of respective denomination, rounded off to the next complete square centimetre.

How much value would one get in exchange of imperfect banknotes?

The value of an imperfect note may be paid for full value / half value under rules as specified for mutilated notes if,

(i) the matter, which is printed on the note has not become totally illegible, and

(ii) it can be satisfied that it is a genuine note.

What types of banknotes are not eligible for payment under the Note Refund Rules?

The following banknotes are not payable under the Reserve Bank of India (Note Refund) Rules 2009.

A banknote for which:

the area of single largest undivided piece of note presented is less than or equal to 50% of area of the note for denominations of Re. 1, Rs. 2, Rs. 5, Rs. 10 and Rs. 20.
the area of the single largest undivided piece of the note is less than 40 percent for denominations of Rs.50, Rs. 100, Rs. 500 and Rs. 1000.

A banknote which:

cannot be identified with certainty as a genuine note for which the Bank is liable under the Act,

has been made imperfect or mutilated, thereby causing the note to appear to be of a higher denomination, or has been deliberately cut, torn, defaced, altered or dealt with in any other manner, not necessarily by the claimants, enabling the use of the same for making of a false claim under these rules or otherwise to defraud the Bank or the public,
carries any extrinsic words or visible representations intended to convey or capable of conveying any message of a political or religious character or furthering the interest of any person or entity,

has been imported into India by the claimant from any place outside India in contravention of the provision of any law.

What if a banknote is found to be non-payable?

Non-payable banknotes are retained by the receiving banks and sent to the Reserve Bank where they are destroyed.

5.5 Banknotes since Independence.

i. Ashoka Pillar Banknotes:

The first banknote issued by independent India was the one rupee note issued in 1949. While retaining the same designs the new banknotes were issued with the symbol of Lion Capital of Ashoka Pillar at Sarnath in the watermark window in place of the portrait of King George.

The name of the issuer, the denomination and the guarantee clause were printed in Hindi on the new banknotes from the year 1951. The banknotes in the denomination of Rs.1000, Rs.5000 and Rs.10000 were issued in the year 1954. Banknotes in Ashoka Pillar watermark Series, in Rs.10 denomination were issued between 1967 and 1992, Rs.20 denomination in 1972 and 1975, Rs.50 in 1975 and 1981, and Rs.100 between 1967-1979. These banknotes are still found in circulation. The banknotes issued during the above period, contained the symbols representing science and technology, progress, orientation to Indian Art forms. In the year 1980, the legend "Satyameva Jayate", i.e., truth alone shall prevail was incorporated under the national emblem for the first time.

To contain the volume of banknotes in circulation, Rs.500, banknote was introduced in October 1987 with the portrait of Mahatma Gandhi and the Ashoka Pillar watermark.

ii. Mahtma Gandhi (MG) Series 1996

The banknotes in MG Series – 1996 are available in the denomination of Rs.5, (introduced in November 2001) Rs.10 (13-06-1996), Rs.20 (24-08-2001), Rs.50 (14-03-1997), Rs.100 (04-06-1996), Rs.500 (20-10.1997) and Rs.1000 (November 2000). All the banknotes of this series bear the portrait of Mahatma Gandhi on the obverse (front) side, in place of symbol of Lion Capital of Ashoka Pillar, which has also been retained and shifted on the same side. This means that these banknotes contain Mahatma Gandhi watermark as well as Mahatma Gandhi's portrait.

Are there any special features in the banknotes of Mahatma Gandhi series- 1996?

The Mahatma Gandhi series-1996 banknotes contained several special features vis-à-vis the banknotes issued earlier. These are

i. Security thread: Rs.10, Rs.20 and Rs.50 notes contain fully embedded security thread. Rs.100, Rs.500 and Rs.1000 banknotes contain windowed security thread. This thread is partially exposed and partially embedded. When held against light, this thread can be seen as one continuous line. Other than on Rs.1000 banknotes, this thread contains the words 'Bharat' in the Devanagari script and 'RBI' appearing alternately. The security thread of the Rs.1000 banknote contains the inscription 'Bharat' in the Devanagari script, '1000' and 'RBI'.

ii. Latent Image: The vertical band next to the (right side) Mahatma Gandhi’s portrait, contains a latent image, showing the denominational value 20, 50, 100, 500 or 1000 as the case may be. The value can be seen only when the banknote is held horizontally and light allowed to fall on it at 45° ; otherwise this feature appears only as a vertical band.

iii. Micro letterings: This feature appears between the vertical band and Mahatma Gandhi portrait. It contains the word ‘RBI’ in Rs.10. Notes of Rs.20 and above also contain the denominational value of the banknotes. This feature can be seen better under a magnifying glass.

iv. Identification mark: A special intaglio feature (raised printing) has been introduced on the left of the watermark window, on the obverse (front) on all banknotes except Rs.10/- banknote. This feature is in different shapes for various denominations (Rs.20-Vertical Rectangle, Rs.50-Square, Rs.100-Triangle, Rs.500-Circle, Rs.1000-Diamond) and helps the visually impaired to identify the denomination

http://www.rbi.org.in/scripts/Images/faq_carr4.jpg

v. Intaglio Printing: The portrait of Mahatma Gandhi, Reserve Bank seal, Guarantee and promise clause, Ashoka Pillar Emblem and RBI Governor's signature are printed in intaglio i.e. in raised prints in Rs.20, Rs.50, Rs.100, Rs.500 and Rs.1000 banknotes.

vi. Fluorescence: The number panels of the banknotes are printed in fluorescent ink. The banknotes also have optical fibres. Both can be seen when the banknotes are exposed to ultra-violet lamp.

vii. Optically Variable Ink: The numeral 500 & 1000 on the Rs.500 [revised colour scheme of mild yellow, mauve and brown] and Rs.1000 banknotes are printed in Optically Variable Ink viz., a colour-shifting ink. The colour of these numerals appears green when the banknotes are held flat but would change to blue when the banknotes are held at an angle.

viii. Watermark: The banknotes contain the Mahatma Gandhi watermark with a light and shade effect and multi-directional lines in the watermark window.

http://www.rbi.org.in/scripts/Images/faq_carr8.jpg

iii) MG series – 2005 banknotes MG series 2005 banknotes are issued in the denomination of Rs.10, Rs.20, Rs.50, Rs.100, Rs.500 and Rs.1000 contain some additional / new security features. The Rs.50 and Rs.100 banknotes were issued in August 2005, followed by Rs.500 and Rs.1000 denominations in October 2005 and Rs.10 and Rs.20 in April 2006 and August 2006, respectively. The additional / new security features in MG Series 2005 banknotes. i. Security Thread: The machine-readable security thread in Rs.10, Rs.20 and Rs.50 denomination banknotes is windowed on front side and fully embedded on reverse side. The thread fluoresces in yellow on both sides under ultraviolet light. The thread appears as a continuous line from behind when held up against light. ii. Rs.100, Rs.500 and Rs.1000 denomination banknotes have machine-readable windowed security thread with colour shift from green to blue when viewed from different angles. It fluoresces in yellow on the reverse and the text will fluoresce on the obverse under ultraviolet light. iii. Intaglio Printing: The portrait of Mahatma Gandhi, Reserve Bank seal, Guarantee and promise clause, Ashoka Pillar emblem, Governor's signature and the identification mark for the visually impaired persons are printed in improved intaglio. iv. See through register: Half the numeral of each denomination (10, 20, 50, 100, 500 and 1000) is printed on the obverse (front) and half on the reverse. The accurate back to back registration makes the numeral appear as one when viewed against light. v. Water Mark and electrotype watermark: The portrait of Mahatma Gandhi, the multi-directional lines and an electrotype mark showing the denominational numeral 10, 20, 50, 100, 500 and 1000 appear in this section respectively in each denomination banknote and these can be viewed better when the banknote is held against light. vi. Optically Variable Ink (OVI): The font size of the numeral 500 and 1000 in Rs.500 and Rs.1000 denomination banknotes is reduced, as compared to MG series banknotes issued in these denominations earlier in the year 2000. The colour of the numeral appears green when the banknote is held flat but would change to blue when the banknote is held at an angle. vii. Dual coloured optical fibres, seen under UV lamp. viii. Year of Printing: Year of printing appears on the reverse of the banknote All these banknotes issued by the Bank are legal tender. The details are also available in the updated version of the Master Circular on Detection and Impounding of Counterfeit Banknotes- (2007). (Annex IV)

Why was the change brought about?

Central banks, the world over change the design of their banknotes and introduce new security features primarily to make counterfeiting difficult and to stay ahead of counterfeiters. India also follows the same policy.

What is a "star series" banknote?

Fresh banknotes issued by Reserve Bank of India till August 2006 were serially numbered. Each banknote bears a distinctive serial number along with a prefix. The prefix consists of numeral and letter/s. The banknotes are issued in packets containing 100 pieces.

The Bank has adopted the "STAR series" numbering system for replacement of defectively printed banknotes, at the printing presses. To begin with, this will be for banknotes of Rs.10, Rs.20 and Rs.50 denomination. The Star series banknotes are exactly like the existing Mahatma Gandhi Series banknotes, but have an additional character viz., a *(star) in the number panel in the space between the prefix and the number. The packets containing these banknotes will not, therefore, have sequential serial numbers, but contain 100 banknotes, as usual. To facilitate easy identification, the bands on such packets clearly indicate the presence of these banknotes in the packet.

http://www.rbi.org.in/scripts/Images/faq_carr11.jpg

5.6 Counterfeits / Forgeries

How does one differentiate between a genuine banknote and forged / counterfeit banknote?

The banknote on which the above explained features i.e., the features of genuine banknotes are not available / absent can be suspected to be a counterfeit banknotes and examined minutely.

What are the legal provisions relating to printing and circulation of forged banknotes?

Counterfeiting banknotes / using as genuine, forged or counterfeit banknotes / possession of forged or counterfeit banknote / making or possessing instruments or materials for forging or counterfeiting banknotes making or using documents resembling banknotes are offences under Sections 489A to 489E of the Indian Penal Code and are punishable in the Courts of Law by fine or imprisonment ranging from seven years to life imprisonment or both, depending on the offence.

5.7 Clean Note Policy:

Reserve Bank of India has been continuously making efforts to make good quality banknotes available to the members of public. To help RBI and banking system, the members of public are requested to ensure the following:

o Not to staple the banknotes

o Not to write / put rubber stamp or any other mark on the banknotes

o Store the banknotes safely to prevent any damage

Any advice contained in this document is general advice only and does not take into account your personal circumstances. Citibank Singapore Limited Terms and Conditions apply for all products held in Singapore Booking Center. Citibank N.A. full Terms and Conditions apply for products held in other booking centers.

1. (a). Important Information for Australia Investors: Deposits are not deposits with Citigroup Pty Limited or Citibank N.A. Sydney Branch. Deposits are not covered by division 2 of the Australian Banking Act and as such are not subject to depositor protection provisions of the act.

(b). Important Information for United Kingdom Investors: © 2009 Citigroup Inc. CITI and Arc Design is a registered service mark of Citigroup Inc. CITI and CITI NEVER SLEEPS are service marks of Citigroup Inc. Citibank is a registered service mark of Citibank N.A. or Citigroup Inc.
Important information for United Kingdom residents: Citibank International plc. Registered in England with number 1088249. Registered office: Citigroup Centre, Canada Square, London E14 5LB. Authorized and regulated by the Financial Services Authority.

2. Citibank Singapore Ltd. Company Registration No.200309485K.

Applicable to customers who apply for leverage against Fixed Income Security or Structured Note: The price of a Fixed Income Security (FIS) or a Structured Note (Note) may fluctuate during the tenure of the FIS/Note dependant upon market conditions. The market valuation of the FIS/Note at any given point of time will be dependant upon (but not limited to) shape of the yield curve, time left to maturity, credit spreads, volatility of interest rates and valuation methodologies. Any movement of the above factors may result in a fall in value of the FIS/Note and hence require Citibank to make a Margin Call.

Applicable to leveraged Premium Account: The risk of loss in foreign currency leveraged investment can be substantial. Investors may sustain losses in excess of their original margin funds. Investors investing in deposits denominated in non-local currency should be aware of the risk of exchange rate fluctuations that may cause a loss of principal. For Premium Account, the investors will be subject to the risk of the fluctuation of the alternate currency and their original funds may be substantially reduced depending on the decline in the alternate currency. Pre-termination before maturity is not allowed. Any loan repayment or top up requirement before maturity will have to be covered by additional funds.

Applicable generally: Investments, where maturity of the investment and maturity of loan do not match, such as Callable Notes, result in taking interest rate risk whereby the loan may be re-priced at a higher rate. Pre-termination of the investment to repay the loan may result in loss of principal. If the loan and/or interest outstanding are not reduced within the prescribed time, your collateral may be liquidated without your consent. Moreover, you will remain liable for any resulting deficit in your account and interest charged on your account. You should therefore carefully consider whether such a financing arrangement is suitable in light of your own financial position and investment objectives

The difference between NRE and NRO accounts?

Balances held in NRE accounts can be repatriated abroad, whereas funds in NRO account are not generally repatriable. Repatriation of balances held in NRO accounts is allowed subject to certain conditions. Funds remitted from abroad or local funds which can otherwise be remitted abroad to the account holder can be credited to NRE accounts. Funds due to the non-resident account holder which do not qualify, under the Exchange Control regulations, for remittance outside India are required to be credited to NRO accounts. The interest income earned on NRO attracts income tax deduction at source

CONCLUSION

"To accomplish great things, we must not only act, but also dream; not only plan, but also believe".

Your Bank has chalked out a Plan of 100 Branches & Rs.10000 crore turnover by the end of year 2010 and a goal to achieve business turnover of Rs.20000 crore in a span of 5 years, by having a pan–India presence, wider customer base, geographic reach as well as increased penetration of the existing customer base with an eye on profitable business without compromising on portfolio quality.

Your Bank has adopted an effective system of Corporate Governance which permits adequate autonomy to the Board of Directors and the Top Management to take decisions that can enhance the progress of your Bank within the framework of regulatory prescriptions, corporate goals and social responsibilities. Your Bank has been actively promoting greater transparency as a part of its measures through wider disclosure of information that reflects the quality of transparency in good governance.

These are just some of the errors that individuals often make with their estates. The good news is that many of these can be easily and quickly rectified, providing the corrective steps are taken before death. Consult with professionals who can help to ensure that your estate planning is on track. These individuals may include your financial or estate planner and your tax attorney.

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