From THE HINDU group of publications
Sunday, October 29, 2000


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FAQs on India Millennium Deposit

*Who is eligible to invest in India Millennium Deposits?

The following types of depositors are eligible to apply:

*Non-resident Indians (NRIs).

*Overseas corporate bodies (OCBs).

*Banks acting in fiduciary capacity on behalf of NRIs/OCBs.

*Who is an NRI?

As per provisions of FEMA, 1999, an NRI is an Indian national or person of Indian origin residing outside India on employment/business/vocation/ or for any other purpose indicating intention to stay outside India for an uncertain period.

*What is an OCB?

Any institution, association or body, established under the laws of a country outside India, wherein any NRI has an interest. Could be a company/association/trust/society/partnership firm.

*Where can I obtain IMD application forms and terms and conditions?

IMD application forms will be available at all overseas SBI branches (except for those located in the US) and designated branches in India. Overseas branches of nationalised banks will also make available the IMD forms and act as collecting banks.

*Can I obtain application forms from branches of any other banks?

Yes, application forms will be available with the designated branches of collecting banks.

*What is the minimum deposit amount under each series?

The minimum deposit is $2,000/2,000/2,000 EUR, and in

multiples of 1,000 thereafter.

*In what denominations are the IMDs available?

IMD certificates, in all series, are available in denominations of 1,000, 5,000, 10,000 and 50,000.

*Is their any ceiling on the deposit amount per depositor?


*Can I make the deposit in joint names?

Yes, joint holding is permitted in the form of `former' or `survivor' provided the first holder is an NRI and the second holder is an NRI or resident Indian.

*Do I have to pay the full amount applied for at the time of submission of the application form?


*Can I choose cumulative or non-cumulative option?

Yes, IMDs are available on cumulative and non-cumulative basis. You should specify the option while applying for the IMDs. The option once made cannot be changed.

*When will the IMD certificates be issued?

IMD certificates will be issued within 60 days from the closing date. (Interim interest will be payable on the deposit amount till the effective date as stated above.)

*What are the tax benefits?

IMDs are free from Indian income-tax, and gift tax and wealth tax benefits are available for non-resident holders as well as donees/assignees and survivors who may be resident holders. Tax benefits are available both till maturity as well as in the case of pre-mature encashment.

*Are principal and interest repatriable?

Yes, fully repatriable for non-resident holders.

*Is premature encashment of IMDs permitted?

Yes, premature encashment of IMDs will be permitted any time after six months from the effective date of deposit, without any penalty. However, such premature encashment would be in non-repatriable Indian rupees.

*Is any loan facility available?

Banks authorised to deal in foreign exchange in India, at their discretion, may grant loans to IMD depositors or third parties against security of IMDs, as per the guidelines that the RBI may stipulate.

In India, such loans will be available only in non-repatriable rupees.

*How can I transfer the IMDs?

IMDs are transferrable by endorsement and delivery between NRIs/OCBs/Banks acting in fiduciary capacity on behalf of NRIs/OCBs. IMDs are also transferrable by endorsement and delivery by NRIs/OCBs/banks acting in fiduciary capacity on behalf of NRIs/OCBs to a resident Indian/charitable trust in India, through gift only.

*Do I have to advise the SBI regarding transfer/gift?

Yes, the gift/transfer must be registered with SBI, NRI Branch, Mumbai. It will attract a service fee of $10 or Rs 500 per certificate.

*If my status changes from NRI to resident Indian, during the tenor of the IMD, can I still repatriate my principal/interest or both to my overseas account?

The principal and interest earned on maturity can be credited to a Resident Foreign Currency (RFC) account from which the money can be repatriated at your option.

*If I have a resident Indian as second joint holder, can I still transfer the IMD from my name to another resident Indian?

Yes. But the transfer to a resident Indian has to be by gift only.

Tax Implications

*If my status changes from NRI to resident Indian, during the tenor of the IMD, do I still continue to enjoy all the tax benefits?


*What are the tax implications if I prematurely encash the IMD?

The same tax exemptions will be available.


Section  : Personal Finance
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