Current Account Transactions

(v) The amount of deposit shall be received either by inward remittance from outside India through normal banking channels or by debit to NRE/FCNR (B) /NRO /NRNR or NRSR account. Where, however, the deposit is made out of funds held in NSRS account of the depositor, payment of interest as also the repayment of deposit shall be made only by credit to NRSR account of the depositor concerned. In all other cases, the maturity proceeds/interest shall be credited to NRO Account.
(vi) The proprietorship concern/firm/company accepting the deposit should comply with provisions of any other law, rules, regulations or orders made by Government or any other competent authority, as are applicable to it in regard to acceptance of deposits.
(vii) The proprietorship concern, firm or company accepting the deposit shall not utilise the amount of deposits for re-Iending (not applicable to a Non-Banking Finance Company) or for undertaking agricultural/plantation activities or real estate business or for investing in any other concern or firm or company engaged in or proposing to engage in agricultural/plantation activities or real estate business.
(viii) The amount of deposits accepted shalInotbe allowed to be repatriated outside India.

Current Account Transactions

~ 15. What is meant by 'Current Account Transaction' under FEMA,1999? 5lns.
Meaning of Current Account Transaction [Section 2 (j)]
"Current account transaction" means a transaction other than a capital account transaction. Without prejudice to the generality of the foregoing such transaction includes
(i) payments due in connection with foreign trade, other current business, ser
vices, and short-term banking and credit facilities in the ordinary course of business ,
(ii) payments due as interest on loans and as net income from investments,
(iii) remittances for living expenses of parents, spouse and children residing
abroad, and
(iv) expenses in connection with foreign travel, education and medical care of
parents, spouse and children.
~ 16. State provisions of FEMA and the Rules made thereunder with respect to regulation of 'Current Account Transactions'.

5lns .
Section 5 provides that any person may sell or draw foreign exchange to or from an authorised person if such sale or drawal is a current account transaction. The same Section empowers the Central Government to impose reasonable restrictions for current account transactions in the public interest in consultation with the Reserve Bank by making appropriate rules.