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Effective from 17th July 1992, the Government
of India has granted exemption from the surrender requirement to persons who
return to India after a continuous stay abroad of one year and above in respect
of funds/assets acquired by them abroad otherwise than a contravention of FEMA
or out of foreign exchange earned through employment, business or vocation
outside India taken up or commenced while they were resident outside
India.
Persons satisfying the conditions of
general exemption can retain their foreign currency accounts with banks abroad
and/or hold, transfer or dispose of their other foreign currency assets such as
shares, securities or investments in business, etc. and immovable
properties.
These assets held abroad can be
repatriated to India and returning Indians can hold them separately in India
with authorised dealers under the Resident Foreign Currency (RFC)
Accounts Scheme.
RESIDENT
FOREIGN CURRENCY (RFC) ACCOUNTS SCHEME
As per FEMA Notification No. 10/2000 RB dated 3 rd
May 2000, Resident individual 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 realised on conversion of assets
held or owned by such person, when he was resident outside India or inherited
from a person who was resident outside India.
Returning Indians, ie., those Indians, who were non-residents
earlier and are returning now for permanent stay, are permitted to open, hold
and maintain with a Bank in India a Resident Foreign Currency (RFC) Account, out
of –
• foreign currency assets held outside India and brought to India
at the time of returning for permanent stay; or
• foreign exchange received as pension or any other
superannuation or other monetary benefits from the employer outside India; or
• foreign exchange released on conversion of the foreign assets
including foreign security or immovable property situated outside India if such
currency, security or property was acquired, held or owned by such person when
he was resident outside India or/and repatriated to India; or
• foreign exchange received or acquired when he was resident
outside India as a gift or inheritance from a person resident outside India and
proceeds have been repatriated to India;
RFC account can be held singly or jointly in the names of eligible
persons.
RFC account can be maintained in the form of Savings, Current and
term deposit. No cheque books are given for RFC-SB account.
RFC account can be opened and maintained in USD, GBP and EURO.
Only certain permissible credits viz., remittances in any
permitted currency from abroad, pension or any other monetary benefits received
from abroad, interest on RFC accounts, foreign currency notes/travellers
cheques, transfers from other RFC account of the account holder, balance in
NRE/FCNR account at the time of his arrival in India and any other amount
specifically permitted by RBI are allowed under RFC.
Funds in RFC accounts can be remitted abroad for any bona fide
purpose of the account holder and his dependents including exchange required for
travel and other personal purposes and investments.
Funds can be transferred from one RFC account to another RFC
account of the same person.
Withdrawals/Payments other than foreign currency remittance
abroad, shall be made in equivalent Indian Rupees only.
FACILITIES FOR RETURNING INDIANS
When a Non Resident Indian customer becomes a person resident in
India, they can retain their foreign currency accounts with banks abroad and/or
hold, transfer or dispose off their foreign currency assets such as shares,
securities, or investment in business and immovable properties. These assets
held abroad can be repatriated to India and returning Indians can hold them
separately in India with Banks under the RFC account.
Returning NRIs are required to redesignate their non-resident
account as resident rupee or RFC account after their arrival in India. However,
they can continue their FCNR (B) deposits till their original maturity date and
on maturity it can be transferred to RFC account.
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