Foreign Exchange Management (Foreign currency accounts by a
person resident in India) Regulations, 2000
[Source: Notification No.FEMA 10/2000-RB dated May 3, 2000]

The Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2000, were made by RBI in exercise of the powers conferred by clause (b) of Section 9 and clause (e) of subsection (2) of Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999) The Regulations relate to 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 and come into force on 1st day of June 2000.

The Regulations defines 'Foreign Currency Account' as an account held or maintained in currency other than the currency of India or Nepal or Bhutan;

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.

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 a Resident Foreign Currency (RFC) Account, out of foreign exchange -

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

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

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

   4. referred to in clause (c) of section 9 of the Act, or acquired as gift or inheritance therefrom.

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 utilisation of foreign currency balances including any restriction on investment in any form, by whatever name called, outside India.

A shipping or airline company incorporated outside India or its agent in India may open, hold and maintain a Foreign Currency Account with an authorised 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.

1. 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.

2. 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.

3. 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

4. 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.

5. A person resident in India, being an exporter who has undertaken a construction contract or a turnkey project outside India or who is exporting services or engineering goods from India on deferred payment terms may open, hold and maintain a Foreign Currency Account with a bank outside India, provided that

   1. approval as required under the Foreign Exchange Management (Export of goods and services) Regulations, 2000 has been obtained for undertaking the contract/project/export of goods or services, and

   2. the terms and conditions stipulated in the letter of approval have been duly complied with

6. A person resident in India who has gone abroad for studies or who is on a visit to a foreign country may open, hold and maintain a Foreign Currency Account with a bank outside India during his stay outside India, provided that on his return to India, the balance in the account is repatriated to India. Provided that short visits to India by a person who has gone abroad for studies, before completion of his studies, shall not be treated as his return to India.

7. A person resident in India who has gone out of India to participate in an exhibition/ trade fair outside India may open, hold and maintain a Foreign Currency Account with a bank outside India for crediting the sale proceeds of goods on display in the exhibition/trade fair. Provided that the balance in the account is repatriated to India through normal banking channels within a period of one month from the date of closure of the exhibition/trade fair.

Unless otherwise stipulated by the Reserve Bank, a person resident in India who has opened and is maintaining a Foreign Currency Account in accordance with the provisions of Regulations 6 and 7, may hold therein foreign exchange without any limit.

A Foreign Currency Account with an authorised dealer in India under these Regulations may be opened, held and maintained -

1. in the form of current or savings or term deposit account in cases where the account holder is an individual, and in the form of current account or term deposit account in all other cases

2. singly or jointly in the name of person eligible to open, hold and maintain such account.

On the death of a foreign currency accountholder, -

1. the authorised dealer with whom the account is held or maintained may remit to a nominee being a person resident outside India, funds to the extent of his share or entitlement from the account of the deceased accountholder.

2. a nominee being a person resident in India, who is desirous of remitting funds outside India out of his share for meeting the liabilities abroad of the deceased, may apply to the Reserve Bank for such remittance.

1. comply with the directions issued by the Reserve Bank from time to time; and

2. submit periodic return or statement, if any, as may be stipulated by the Reserve Bank .