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Facility
for Resident Individuals
A person resident in India can open,
hold and maintain with an authorized 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. Pending publication of the Notification by the
Government, Authorized dealers are required to forward the request
received by them for opening of Resident Foreign Currency (Domestic)
Accounts to Regional Office of the Reserve Bank with their
recommendations.
Residents are allowed to retain up to
US$ 2000 or its equivalent in aggregate, provided that such foreign
exchange in the form of currency notes, bank notes and travellers
cheques:
(i)
Was acquired by him 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
(ii)
Was acquired by him, from any person not resident in India and
who is on a visit to India, as honorarium or gift or for services
rendered or in settlement of any lawful obligation; or
(iii)
Was acquired by him by way of honorarium or gift while on a
visit to any place outside India; or
(iv)
Represents the unspent amount of foreign exchange acquired by
him from an authorised person for travel abroad.
As a step towards further
liberalisation, it has been decided to allow a person resident in India
to 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 travelers cheques from the sources specified at
items (a) to (d) above. Resident Foreign Currency (Domestic) Account
may also be credited with/opened out of, foreign exchange earned and
/ or gifts received from close relatives (as defined in the Companies
Act) and repatriated to India through normal banking channels by
resident individuals.
Foreign exchange earnings could be
through export of goods and/or services, royalty, honorarium, etc.
Debits to the account shall be for payment towards current/capital
account transactions in accordance with the existing foreign exchange
regulations. The account will be maintained in the form of current
account and shall not bear any interest. Cheque facility will be
available. There will be no ceiling on the balances held in the
account.
The facility of
opening of RFC (Domestic) Account is in addition to the existing
facility of (i) RFC facility provided under Regulation 5 of
Notification No. FEMA 10/ 2000-RB dated 3rd
May 2000 and (ii) retention of foreign exchange in cash and/or
travellers cheques up to US$ 2000 or its equivalent available in terms
of Regulation 3 (iii) of Notification No. FEMA 11/RB-2000 dated 3rd
May, 2000.
While opening
these accounts the Authorized Dealers should however, follow the same
procedures, including ‘Know Your Customer’ guidelines as applicable for
opening any other domestic account.
Foreign Currency Account of a
unit in a Special Economic Zone
A unit located in a Special Economic
Zone may open hold and maintain a Foreign Currency Account with an
authorized dealer in India provided:
(a)
all foreign exchange funds received by the unit in the Special
Economic Zone (SEZ) are credited to such account,
(b)
no foreign exchange purchased in India against rupees shall be
credited to the account without prior permission from the Reserve Bank,
(c)
the funds held in the account shall be used for bonafide trade
transactions of the unit in the SEZ with the person resident in India
or otherwsie,
(d)
the balances in the accounts shall be exempt from the
restrictions imposed under Rule 5, except item 3 and 4 of the Schedule
III, of the Government of India Notification No.GSR.381(E) dated May 3,
2000.
The funds held in these accounts shall
not be lent or made available in any manner to any person or entity
resident in India not being a unit in Special Economic Zones.”
Reserve Bank
of India
(Exchange
Control Department)
Central Office
Mumbai
Notification No.
FEMA. 74/2002-RB.
Dated: November
1, 2002
Foreign
Exchange Management (Foreign Currency Accounts by a Person Resident in
India) (Amendment) Regulations, 2002
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), and in
partial modification of its Notification No. FEMA 10/2000-RB dated May
3, 2000, the Reserve Bank of India makes the following amendments in
the Foreign Exchange Management (Foreign Currency Accounts by a Person
Resident in India) Regulations 2000, namely :-
1. Short title
and commencement
(a)
These Regulations may be called the Foreign Exchange Management
(Foreign Currency Accounts by a Person Resident in India) (Fifth
Amendment) Regulations, 2002.
(b)
They shall come into force on their publication in the Official
Gazette.
2.
Amendment of the Regulations
In the Foreign
Exchange Management (Foreign Currency Accounts by a Person Resident in
India) Regulations, 2000, after Regulation 5 the following Regulation
shall be added, namely :
“5 A. Opening,
holding and maintaining a Resident Foreign Currency (Domestic) Account
(1) A person
resident in India 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 :
(a)
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
(b)
from any person not resident in India and who is on a visit to
India, as honorarium or gift or for services rendered or in settlement
of any lawful obligation; or
(c)
by way of honorarium or gift while on a visit to any place
outside India; or
(d)
represents the unspent amount of foreign exchange acquired by
him from an authorised person for travel abroad.
(2) 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.
(3) The
account shall be maintained in the form of Current Account and shall
not bear any interest.
(4) There
shall be no ceiling on the balances in the account.”
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