RAS question
NRI deposits in India are classified into:
Correct answer: (C) NRE, NRO, and FCNR accounts.
NRI deposits in India are classified as Non-Resident External rupee accounts, Non-Resident Ordinary rupee deposits, and Foreign Currency Non-Resident Bank deposits.
Explanation
NRI deposits are not a generic savings-current-fixed split; they are treated as specific non-resident deposit categories. The RBI working paper states that non-resident deposits are in the form of Foreign Currency Non-Resident deposits [FCNR(B)], Non-Resident External (NRE) rupee accounts and Non-Resident Ordinary (NRO) rupee deposits. That matches the standard exam distinction: NRE accounts are rupee-denominated and freely repatriable, NRO accounts are rupee-denominated with limited repatriability, and FCNR(B) deposits are foreign-currency-denominated and freely repatriable. The RBI source also notes that NRE deposits may be current, savings or term deposits, NRO deposits may be current, savings, recurring or term deposits, while FCNR(B) deposits are term deposits in nature.
Why the other options are wrong
- (A) Savings and current accounts describe possible account forms, but the RBI classification of non-resident deposits is by NRE, NRO and FCNR(B), not only by savings and current accounts.
- (B) NRE is only one non-resident deposit category; the RBI source also lists NRO rupee deposits and FCNR(B) deposits.
- (D) Fixed or term deposits cover only part of the structure, since NRE and NRO deposits can also take non-term account forms while FCNR(B) deposits are term deposits in nature.
Concept
This tests external-sector banking and balance-of-payments terminology, especially how India classifies non-resident deposits. RAS repeats such items because NRI deposits link banking regulation, repatriability and foreign-exchange flows.