Returning Indians, i.e. those Indians, who were non-residents earlier and are returning now for permanent stay, are permitted to open, hold and maintain with an Authorized Dealer in India a Foreign Currency Account, to be known as a Resident Foreign Currency (RFC) Account, out of –
[a] Foreign currency assets held outside India and brought to India at the time of returning for permanent stay;
[b] Foreign exchange received as pension or any other superannuation or other monetary benefits from the employer outside India;
[c] Foreign exchange realised 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;
[d] 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;
[e] Foreign exchange received by a resident individual who was non-resident earlier and has returned for permanent stay in India, by way of the proceeds of life insurance policy claims / maturity / surrender values settled in foreign currency from an insurance company in India permitted to undertake life insurance business by the Insurance Regulatory and Development Authority.
2. DESIGNATED CURRENCIES:
RFC Accounts can be maintained in US Dollars [USD], Sterling Pounds [GBP], Euro [EUR], Canadian Dollars [CAD] and Australian Dollars [AUD].
3. TYPES OF ACCOUNTS:
3.1 RFC Accounts can be maintained in the form of Current/Savings Bank [without cheque facility] and term deposits other than Recurring Deposit accounts. Savings Bank accounts cannot be opened for trade and commercial purposes.
3.2 RFC Accounts can be held singly or jointly in the names of eligible persons. Addition of names other than those of eligible persons is not permitted.
4. PERMITTED CREDITS:
4.1 Remittance in any convertible foreign currency from abroad through normal banking channels.
4.2 Pension or any other monetary benefits received from abroad in any convertible foreign currency through normal banking channels.
4.3 Interest earned on RFC accounts.
4.4 Foreign currency notes/travelers cheques in any permitted currency brought into India by account holder.
4.5 Transfers from other RFC accounts of the account holder.
4.6 Balances in NRE/FCNR (B) accounts in the name of the account holder at the time of arrival in India.
4.7 Unspent foreign exchange surrendered by the RFC account holders.
4.8 Foreign exchange received as gift or inheritance from a person who is resident outside India.
5. PERMITTED DEBITS:
5.1 The funds in the account can be freely utilised by the account holder for any bonafide remittance outside India through normal banking channels including for investments abroad.
5.2 Release of exchange for travel abroad, and also for other purposes as enumerated in Foreign Exchange Regulations, as applicable to other Indian residents, may also be released to RFC account holders.
5.3 Transfer to other RFC accounts of the account holder.
5.4 Withdrawals/payments, other than for foreign currency remittance abroad shall be made in equivalent Indian Rupees only.
5.5 RFC account holders can also use International Credit Cards [ICCs] freely without any end-use restrictions, provided the reimbursements are made by debit to the RFC account.