[G.S.R.393(E)]

In exercise of the powers conferred by clause (b) of Section 9 and clause (e) of sub-section (2) of Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank of India makes the following regulations for opening, holding and maintaining of Foreign Currency Accounts and the limits upto which amounts can be held in such accounts by a person resident in India, namely. 

These Regulations may be called the Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2000.

‘Authorised dealer’ means a person authorised as an authorised dealer under sub-section (1) of section 10 of the Act

‘Foreign Currency Account’ means an account held or maintained in currency other than the currency of India or Nepal or Bhutan;

The words and expressions used but not defined in these Regulations shall have the same meanings respectively assigned to them in the Act. 

Save as otherwise provided in the Act or rules or regulations made thereunder, no person resident in India shall open or hold or maintain a Foreign Currency Account: 

Provided that a Foreign Currency Account held or maintained before the commencement of these Regulations by a person resident in India with special or general permission of the Reserve Bank, shall be deemed to be held or maintained under these Regulations: 

Provided further that the Reserve Bank, may on an application made to it, permit a person resident in India to open or hold or maintain a Foreign Currency Account, subject to such terms and conditions as may be considered necessary.

A person resident in India may open, hold and maintain with an authorised dealer in India, a Foreign Currency Account to be known as Exchange Earner’s Foreign Currency (EEFC) Account, subject to the terms and conditions of the Exchange Earners’ Foreign Currency Account Scheme specified in the Schedule.

A person resident in India may open, hold and maintain with an authorised dealer in India a Foreign Currency Account, to be known as a Resident Foreign Currency (RFC) Account, out of foreign exchange–

received as pension or any other superannuation or other monetary benefits from his employer outside India; or 

realised on conversion of the assets referred to in sub-section (4) of section 6 of the Act, and repatriated to India; or

received or acquired as gift or inheritance from a person referred to in sub-section (4) of section 6 of the Act; or

2)

The funds in a Resident Foreign Currency Account opened or held or maintained in terms of sub-regulation (1) shall be free from all restrictions regarding utilization of foreign currency balances including any restriction on investment in any form, by whatever name called, outside India; 

5A⁵

Opening, holding and maintaining a Resident Foreign Currency (Domestic) Account

1) ⁵

 [A resident individual] may open, hold and maintain with an Authorised Dealer in India a foreign

currency account, to be known as Resident Foreign Currency (Domestic) Account, out of foreign exchange acquired in the form of currency notes, bank notes and travellers cheques :  

while on a visit to any place outside India by way of payment for services not arising from any business in or anything done in India; or

by way of honorarium or gift while on a visit to any place outside India; or

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Debits to the account shall be for payments towards a current account transaction in accordance with the provisions of the Foreign Exchange Management (Current Account Transactions) Rules, 2000 and towards a capital account transaction permissible under the Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000.

(1) A shipping or airline company incorporated outside India or its agent in India, may open, hold and maintain a Foreign Currency Account with an authorized dealer in India for meeting the local expenses in India of such airline or shipping company:

Provided that the credits to such accounts are only by way of freight or passage fare collections in India or by inward remittances through normal banking channels from its office outside India and, in the case of agent, from his principal outside India.

(2) An authorized dealer in India may, subject to the directions as may be issued by the Reserve Bank, allow ship-manning/crew managing agencies in India to open and maintain non-interest bearing foreign currency accounts in India for the purpose of undertaking transactions in the ordinary course of their business.”

6A⁶ 

Foreign Currency Account of a Unit in a Special Economic Zone

all foreign exchange funds received by the unit in the Special Economic Zone (SEZ) are credited to such accounts;  

the funds held in the account shall be used for bona fide trade transactions of the unit in the SEZ with the person  resident in India or otherwise;

An authorised dealer in India may open, hold and maintain with his branch or head office or correspondent outside India, a Foreign  Currency Account for the purpose of transacting foreign exchange business and other matters incidental thereto, in accordance with the provisions of the Act or the rules or regulations made or the directions issued thereunder.

A branch outside India of a bank incorporated or constituted in India may open, hold and maintain with a bank outside India, a Foreign Currency Account for the purpose of carrying on normal banking business outside India, subject to compliance with the directions or guidelines issued from time to time by the Reserve Bank, and the regulatory authority in the country where the branch is located.

A shipping or airline company incorporated in India may open, hold and maintain with a bank outside India, a Foreign Currency Account for the purpose of undertaking transactions in the ordinary course of its business.

Life Insurance Corporation of India or General Insurance Corporation of India and its subsidiaries may open, hold and maintain with a bank outside India, a Foreign Currency Account for the purpose of meeting the expenditure incidental to the insurance business carried on by them and for that purpose, credit to such account the insurance premia received by them outside India.

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4A)

A firm or a company or a body corporate registered or incorporated in India (hereinafter referred to as ‘the Indian entity’) may open, hold and maintain in the name of its office (trading or non-trading) or its branch set up outside India or its representative posted outside India, a foreign currency account with a bank outside India by making remittances from India for the purpose of normal business operations of the office/branch or representative;

Provided that -

a)

the overseas branch/office has been set up or representative is posted overseas for conducting normal business activities of the Indian entity;

b)

the total remittances made under this sub-Regulation by the Indian entity, to all such accounts in an accounting year shall not exceed

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i.)

15 per cent of the average annual sales/income or turnover of the Indian entity during the last two financial years or up to 25 per cent of the net worth, whichever is higher, where the remittances are made to meet initial expenses of the branch or office or representative, and

ii)

10 per cent of such average annual sales/income or turnover during the last financial years where the remittances are made to meet recurring expenses of the branch or office or representative.

c)

the overseas branch/office/representative shall not enter in any contract or agreement in contravention of the Act, Rules or Regulations made thereunder;

d)

the account so opened, held or maintained shall be closed,

a

if the overseas branch./office is not set up within six months of opening the account, or

b

within one month of closure of the overseas branch/office, or

c

where no representative is posted for six months.

and the balance held in the account shall be repatriated to India;

Provided further that the restriction contained in clause (b) of the first proviso shall not apply in a case where -

a)

the remittances to the account maintained under this sub-Regulation are made out of funds held in EEFC account of the Indian entity, or

b)

the overseas branch/office is set up or representative posted by a 100% EOU or a unit in EPZ or in a Hardware Technology Park or in a Software Technology Park, within two years of establishment of the Unit.