The Reserve Bank of India (RBI) has directed banks to convert credit balances in any inoperative foreign currency denominated deposit into the Indian rupee if the former remains not in use for a period of three years from date of maturity of deposit.
"In case a foreign currency denominated deposit with a fixed maturity date remains inoperative for a period of three years from the date of maturity of the deposit, at the end of the third year, the authorised bank shall convert the balances lying in the foreign currency denominated deposit into Indian Rupee at the exchange rate prevailing as on that date," the RBI said in notification.
Thereafter, the depositor shall be entitled to claim either the said Indian rupee proceeds and interest or the foreign currency equivalent (at prevalent exchange rate) of the Indian rupee proceeds of the original deposit, the apex bank added.
It further said in case of inoperative foreign currency-denominated deposit not in use for three years and having no fixed maturity period, the bank should give three month notice to the depositor and convert the deposit from the foreign currency to Indian rupee.
The conversion needs to be done at the end of the notice period at the prevailing exchange rate, it added.
"...the depositor shall be entitled to claim either the said Indian rupee proceeds and interest thereon, if any, or the foreign currency equivalent of the Indian rupee proceeds of the original deposit and interest," the RBI further said.
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