Authorised dealers may allow transfer of funds held in FCNR(B) accounts of different persons maintained with themselves or with other authorised dealers for any purpose subject to the following conditions:

(a) Authorised dealers should levy penalty if such transfer involves premature withdrawal of FCNR(B) deposits.

(b) Where the transfer of funds is by way of gift, it may be allowed after obtaining an undertaking from the transferee/transferees bank that gift tax, if any, payable on the transfer of funds will be paid to the Income-tax authorities in India.

(c) In case of transfer of funds held in the FCNR(B) accounts held with different authorised dealers, the authorised dealer transferring the funds should issue a certificate confirming the nonresident status of the transferor and repatriable nature of funds.