CHAPTER 14
FOREIGN CURRENCY ACCOUNTS IN
INDIA
PART A
FOREIGN CURRENCY (NON-RESIDENT) ACCOUNTS - [FCNR(A)]
PART B FOREIGN CURRENCY (NON-RESIDENT) ACCOUNTS (BANKS) SCHEME - [FCNR(B)]
PART D -
EXCHANGE EARNERS FOREIGN CURRENCY (EEFC) ACCOUNTS
PART E - RESIDENT
FOREIGN CURRENCY (RFC) ACCOUNTS
PART F - OTHER FOREIGN
CURRENCY ACCOUNTS
FOREIGN CURRENCY ACCOUNTS IN INDIA
Introduction
14.1
- Opening of accounts expressed in foreign currency with authorised
dealers in India by non-residents/residents require general or special
permission of Reserve Bank. Non-resident individuals/entities are permitted
to maintain foreign currency accounts/deposits in India under special
schemes. Reserve Bank has also granted general permission for opening of
foreign currency accounts in India to residents/returning Indians under
different schemes. Non-residents/resident firms/companies are also permitted
to open foreign currency accounts with authorised dealers in India for
certain specified purposes. The various schemes and the purposes for which
authorised dealers have been permitted to open foreign currency accounts in
India have been discussed in this Chapter.
- Applications for permission to open foreign currency accounts with
authoriseddealers in India in other cases should be referred to Reserve Bank
with full particulars.
PART A FOREIGN CURRENCY (NON-RESIDENT)
ACCOUNTS - [FCNR(A)]
General
14A.1 In terms of Non-resident (External) Accounts Rules, 1970 (See Appendix II
in Volume II) FCNR(A) accounts were opened and maintained by authorised dealers
in India designated in certain foreign currencies. However, the Scheme was
subsequently withdrawn with effect from 15th August 1994.
PART B FOREIGN CURRENCY (NON-RESIDENT)
ACCOUNTS (BANKS) SCHEME - [FCNR(B)]
General
14B.1 FCNR accounts under the scheme are opened and maintained in terms of
Non-resident (External) Accounts Rules, 1970 (See Appendix II in Volume II). The
provisions applicable to NRE accounts and detailed in paragraphs 13B.1 to 13B.16
apply, mutatis mutandis, to FCNR(B) accounts as well. The authorised dealers are
allowed to accept deposits from NRIs and OCBs in such currencies as specified by
Reserve Bank from time to time. At present, accounts are permitted to be
maintained only in Pound Sterling, U.S.dollar, Deutsche Mark and Japanese Yen.
The salient features of the scheme are as under :
- Reserve Bank will not provide exchange rate guarantee to banks for
deposits of any maturity ((under the Scheme.
- FCNR(B) accounts are permitted to be opened only in the form of term
deposits. The deposits may be accepted for three maturities viz. one year
and above but less than 2 years, two years and above but less than 3 years
and three years only.
- In respect of liabilities representing amounts received under the scheme
authorised dealers are required to comply with CRR/SLR requirements as laid
down by Reserve Bank from time to time.
- Lending of resources mobilised under the Scheme will not be subject to
any interest rate stipulations.
- Advances outstanding against the accounts under this Scheme will not be
considered as part of net bank credit for the purpose of determining
priority sector lending.
NOTES: A Authorised dealers may accept deposits under
FCNR(B) accounts scheme with the facility of automatic reinvestment of
interest as and when it accrues, provided the compounding of interest on the
deposits, period of deposit, etc. are otherwise in conformity with
directives issued by Reserve Bank from time to time and subject to
guidelines issued by Indian Banks' Association/Foreign Exchange Dealers'
Association of India in this regard.
B Premature withdrawal of NRE/FCNR(B) deposits for the purpose of opening
NRNR Rupee Deposit accounts with a different authorised dealer will attract
penalty as per the directions issued by Reserve Bank from time to time.
Opening of and Utilisation of Funds in FCNR(B) Accounts 4 3
14B.2
- FCNR(B) term deposit accounts may be opened with funds remitted from
abroad in convertible foreign currency through normal banking channel or
funds received in rupees by debit to the 2 0 0 2VOSTRO accounts of
non-resident banks or funds which are of repatriable nature in terms of
general or special permission granted by Reserve Bank. The accounts under
the Scheme may also be opened by transfer of funds from the existing
NRE/FCNR accounts of the non-resident account-holders at the time of
maturity or when prematurely withdrawn.
- Instructions contained in paragraph 13B.21 to 13B.23 are applicable,
mutatis mutandis, to FCNR(B) accounts also.
Mode of Remittance
14B.3
- Remittances from abroad for opening/crediting to FCNR(B) accounts would
ordinarily be made only in the designated currency in which the account is
desired to be opened/maintained. If, 2 0 0 2however, remittance is received
in a currency other than the designated currency (including funds received
in rupees by debit to the account of a non-resident bank) it will be
converted into the latter currency by an authorised dealer at the risk and
cost of the remitter and account opened/maintained in the designated
currency.
- In case a customer with any convertible currency other than a designated
currency desires to place a deposit under the Scheme, authorised dealers can
undertake a fully covered swap in that currency against the desired
designated currency with the depositor. There is no objection also for such
a swap being done between two designated currencies.
Conversion of Rupees into Designated Currencies and vice versa
14B.4
- Remittances received in Indian rupees for opening FCNR(B) accounts in
conformity with paragraph 14B.2(i) should be converted by authorised dealers
into the designated foreign currency at the clean T.T. selling rate for that
currency ruling on the date of conversion.
- Maturity proceeds of FCNR(B) accounts or premature withdrawal thereof
for purpose of meeting -4 0 0 -4local disbursements including investment
requirements of account holder in India should be converted into rupees at
the authorised dealer's clean T.T. buying rate for the relative currency
ruling on the date of withdrawal.
Inland Movement of Funds
14B.5 Any inland movement of funds for the purpose of operating FCNR(B) Accounts
as well as for repatriation abroad of balances held in FCNR(B) accounts will be
free of inland exchange or commission for the non-resident depositors.
Authorised dealers receiving foreign currency remittances under the Scheme will
also on request pass on the foreign currency to another authorised dealer if
FCNR(B) account has to be opened with the latter, at no extra cost to remitter.
Manner of Payment of Interest
14B.6
- Interest on balances held in FCNR(B) accounts may be paid half-yearly or
on an annual basis as desired by the depositor.
- Interest may be credited to a new FCNR(B) account or an existing/new
NRE/NRO account in the -5 0 0 -5name of the account holder, at his option.
Loans/overdrafts against FCNR(B) deposits
14B.7 In case of loans/overdrafts against FCNR(B) deposits, the margin
requirement shall be calculated on the rupee equivalent of the deposits at the
prevailing notional rate of exchange for the relative currency.
Transfer of Funds held in FCNR(B) Accounts
14B.8 Authorised dealers may allow transfer of funds held in FCNR(B) accounts of
different persons maintained with themselves or with other authorised dealers
for any purpose subject to the following conditions:
- Authorised dealers should levy penalty if such transfer involves
premature withdrawal of FCNR(B) deposits.
- Where the transfer of funds is by way of gift, it may be allowed after
obtaining an undertaking from the transferee/transferee's bank that gift
tax, if any, payable on the transfer of funds will be paid to the Income-tax
authorities in India.
- In case of transfer of funds held in the FCNR(B) accounts held with
different authorised dealers, the authorised dealer transferring the funds
should issue a certificate confirming the non-resident status of the
transferor and repatriable nature of funds.
FCNR(B) Deposits of NRIs on Return to India
14B.9 The FCNR(B) deposits of persons of Indian nationality/origin who return to
India for permanent settlement may be allowed to be continued till maturity at
the contracted rate of interest, if desired. However, except the provisions
relating to rate of interest and reserve requirements as applicable to FCNR(B)
deposits, for all other purposes such deposits would be treated as resident
deposits from the date of return of the accountholder to India. In case the
FCNR(B) deposits are withdrawn before maturity, the directions issued in this
regard by Reserve Bank including directions, if any, about levy of penalty would
be applicable. Authorised dealers should convert the FCNR(B) deposits on
maturity into resident rupee deposits accounts or RFC account (if eligible), at
the option of the accountholder and interest on the new deposit (rupee account
or RFC account) would be payable at the relevant rate applicable for such a
deposit.
Statement of Inflow, Outflow and Outstanding Deposits under FCNR
Accounts (Banks) Scheme
14B.10 Authorised dealers should submit a monthly statement for the bank as a
whole, in form STAT 5 showing the inflow, outflow and outstanding deposits under
the Foreign Currency (Non-Resident) Accounts (Banks) Scheme during the month, so
as to reach the Reserve Bank before the 10th day of the month following that to
which it relates.
PART C FOREIGN CURRENCY (ORDINARY - NON-REPATRIABLE)
DEPOSIT (FCONR) SCHEME
General
14C.1 Foreign Currency (Ordinary - Non-repatriable) Deposit (FCONR) Accounts in
the names of non-residents denominated in U.S. dollar were allowed to be opened
by authorised dealers out of funds transferred to India in an approved manner in
convertible foreign currency from abroad or by transfer of funds from NRE/FCNR
accounts. The Scheme was withdrawn with effect from 20th August 1994.
PART D - EXCHANGE EARNERS FOREIGN CURRENCY (EEFC) ACCOUNTS
General
14D.1
- Reserve Bank, by its Notification No.F.E.R.A. 183/98-RB dated 22nd
April, has permitted exporters of goods and services and other beneficiaries
of inward remittances in convertible foreign currency, other than those
remittances received pursuant to undertakings given by them or those
received for meeting specific obligations, to open and maintain with
authorised dealers in India accounts expressed in foreign currency and
titled 'Exchange Earners Foreign Currency (EEFC) Accounts' and to credit to
such accounts amounts not exceeding 50% of such remittances and operate on
such accounts. In the case of 100% Export Oriented Units or units located in
Export Processing Zones or in Software Technology Parks or in Electronic
Hardware Technology Parks, amounts up to 70% of the remittances can be
credited to such accounts. Authorised dealers may also allow credits to EEFC
accounts in the following cases:
- Up to 50%/70% of the inward remittances, as the case may be, received
towards export advance in freely convertible currencies subject to
monitoring of the advances received by the authorised dealers concerned in
terms of paragraph 6C.6.
- Up to 50% of the payments received by exporters by debit to U.S.Dollar
Escrow accounts maintained in India as also under the foreign currency debt
repayment route, towards value of goods exported by them.
- Up to 50% of the payments received by hotels from Credit Card Servicing
Organisations (CCSO) in India in rupees against goods/services sold/supplied
to foreign tourists against international credit cards issued abroad,
provided CCSO in India confirms that the total bill amount as per charge
slips received by the hotels has been realised in convertible foreign
currency in an approved manner. In such cases foreign exchange equivalent of
the 50% of the amount received in rupees may be credited to their EEFC
accounts by converting at the market rate.
Note: Unspent foreign exchange surrendered out of the foreign exchange
obtained for travel abroad may be re-credited to EEFC account, provided the
foreign exchange was released by debit to the same EEFC account .
- The resident beneficiaries of the payments received in foreign exchange
from the EEFC account holders in accordance with Notification
No.F.E.R.A.186/98-RB dated 4th September 1998 issued by Reserve Bank will be
required to surrender the foreign exchange within seven days of its receipt
to an authorised dealer as per the existing regulations. The resident
beneficiaries of foreign exchange in such cases will not be eligible for
EEFC facility.
EEFC Accounts not permitted in certain cases
14D.2(i) Exporters maintaining foreign currency accounts in terms of
paragraph 6A.12 are not eligible to maintain EEFC accounts.
14D.2(ii) Authorised dealers may maintain EEFC account in any convertible
foreign currency and in any form (current, savings or term deposit
accounts). Savings bank accounts in the names of firms, companies, etc.
should, however, not be permitted.
Minimum balance
14D.3
Authorised dealers maintaining EEFC accounts may prescribe a suitable
minimum balance
for these accounts.
Utilisation of Funds for Approved Purposes only
14D.4
- Authorised dealers may allow utilisation of funds held in EEFC
accounts for making all bonafide payments of the account holders in foreign
exchange connected with their trade and business related transactions which
are of a current account nature (besides certain permitted capital account
transactions) without any restrictions except in the case of remittance of
agency commission. In other words such business/trade related remittances
may be allowed by authorised dealers beyond the monetary or percentage
ceiling if any, prescribed in ECM, except that where rate of agency
commission on export exceeds 12.5% of invoice value prior approval of
Reserve Bank should be obtained. 14D.4
- The funds held in EEFC accounts may be permitted to be utilised by the
account
holder for all bona fide payments of the account holder subject to the
limits and conditions and on verification of documents prescribed in the
Manual and/or against permits issued by Reserve Bank. Authorised dealers may
also permit utilisation of the funds held in EEFC accounts for making bona
fide payments of the account holders in foreign exchange connected with
their trade and business related transactions which are of a current account
nature (i.e. other than for capital account transactions viz. for
investments abroad or for repayment of loans, etc.), without any restriction
except in the case of remittance of agency commission on exports. In other
words such business/trade related remittances may be allowed by authorised
dealers beyond the monetary or percentage ceilings, if any, prescribed in
the Manual or for similar other purposes not expressly stated therein but
where the rate of agency commission on exports exceeds 12.5 per cent (cf.
paragraph 6E.2) prior approval of Reserve Bank should be obtained. Before
allowing such remittances authorised dealers should satisy themselves about
the bona fides of the transaction with reference to the documentary evidence
produced by the account holder. Doubtful cases should, however, be referred
to Reserve Bank with full details together with comments of the authorised
dealer.
- Funds held in EEFC accounts may also be allowed to be used for the purposes
listed in Annexure I.
NOTE: Funds held in EEFC accounts may also be allowed to be utilised for
payment of air fare and hotel expenditure abroad in connection with visits
abroad of the employees/directors etc. of the account holder.
Reserve Requirements
14D.5 The balances in the EEFC accounts will be subject to Cash Reserve
Ratio and Statutory Liquidity Ratio as prescribed by Reserve Bank from time
to time.
Rate of Interest
14D.6
The rate of interest payable on the balances in savings/term deposit
accounts will be
determined by the banks taking into account the interest rates prevailing in
international markets. No interest is payable on the balances held in the
form of current accounts.
Transfer to Other Accounts
14D.7
Funds held in the EEFC accounts will not be permitted to be sold/transferred
to accounts
of other residents in India. However, authorised dealers may permit, on
application, transfer of funds from the EEFC account/s of the Indian tour
operator/s to EEFC accounts of hotels and other establishment/s provided the
tour operator confirms that the amount represents the proportionate share of
the latter in relation to the services rendered to foreign tourists.
Liquidation of Export Credit
14D.8
In case the exporter has obtained any export credit from a bank against
shipment in
respect of which a percentage of the proceeds is sought to be credited to
the EEFC account, authorised dealers should ensure that the export credit
has been liquidated fully before affording any credit out of export proceeds
to the EEFC account.
Issue of cheques against EEFC balances
14D.8A
- Authorised dealers may allow EEFC account holders the facility of
making payments from such accounts for eligible purposes by issue of cheques
to the beneficiaries of the payment. In order to facilitate easy
identification of cheques drawn on EEFC accounts, authorised dealers may
issue to their constituents maintaining EEFC accounts with them, separate
cheque books containing a special series of cheques distinct from cheques
issued on domestic rupee accounts and NRE accounts superscribed with the
words 'EEFC Account'. Authorised dealers may fix their own requirement of
minimum balance in the account for being eligible to avail of cheque
facility. While allowing the above facility authorised dealers should advise
the EEFC account holders that while issuing cheques for making payments in
foreign exchange out of funds held in EEFC accounts, they will ensure that
the cheques are issued for payments for approved purposes only and the
relevant exchange control regulations are complied with.
- EEFC account holders should immediately after issue of the cheque, but
in any case not later than seven days, submit an application to authorised
dealer on form A1 or A2, as the case may be, together with supporting
documents giving full particulars of transaction for which cheque was
issued.
- While making payment of cheques issued on EEFC account, authorised
dealers should satisfy themselves that the transaction in question is
permissible under the current exchange control regulations. Any payment made
by issue of a cheque for a purpose for which use of funds held in EEFC
account is not permissible should be reported to Reserve Bank promptly.
- The transaction should be reported in appropriate 'R' return when the cheque is cleared for payment.
Facilities against the Security of Deposits
14D.9
Credit facilities whether fund based or non fund based, in rupees or in
foreign exchange, may be granted either in India or abroad, against the
security of funds held in the EEFC accounts. The repayment of such credit
facilities should be made out of the balance in the EEFC account of the
concerned depositor. The facility should be used for normal business
purposes only and not for any on-lending or for investment in shares,
securities, etc.
Statement of Operations on EEFC Accounts
14D.10
Deleted
PART E - RESIDENT FOREIGN CURRENCY (RFC) ACCOUNTS
General
14E.1
A scheme known as 'Resident Foreign Currency Accounts (RFC accounts) Scheme'
has been
drawn up by Reserve Bank in pursuance of Government of India Notification
No. F.10/22/90/NRI Cell dated 17th July 1992 and Reserve Bank Notifications
Nos. FERA.116, 117 and 118 /92-RB dated 7th September 1992 to enable
eligible returning Indians to open and maintain foreign currency accounts
with authorised dealers in India. The Scheme has been reproduced in Annexure
II. Reserve Bank has also granted exemption from the prohibition imposed
under Section 24 of FERA 1973 in respect of gift of foreign exchange held in
India/abroad or of any property held abroad in certain cases referred to in
its Notification No. FERA 165/95-RB dated 28th April 1995.
Opening of RFC Accounts
14E.2
- Under the scheme, persons of Indian nationality or origin, who, having been
resident
outside India for a continuous period of not less than one year, have become
persons resident in India on or after 18th April 1992 are eligible to open
and maintain the accounts with authorised dealers in India in any freely
convertible foreign currency. Authorised dealers may, on receipt of an
application in form RFC, open RFC accounts in the names of eligible persons.
Persons who return to India after a short assignment of less than one year
abroad desiring to have RFC accounts should apply through authorised dealers
to Reserve Bank in form RFC. RFC accounts opened with the specific approval
of Reserve Bank will be governed by the conditions stipulated by Reserve
Bank while granting such approval.
NOTE:
For arriving at the period of continuous stay abroad of not less than one
year, short visits to India on personal grounds like meeting family
members/relatives or on health grounds which do not indicate the person's
intention to stay in India for an indefinite period may be ignored.
- RFC accounts may be maintained in the form of current, savings (without
cheque
facility) or term deposit accounts and held singly or jointly only in the
names of eligible persons.
NOTES:
A.
Persons who returned to India prior to 18th April 1992 after having been
resident outside India for a continuous period of not less than one year are
also eligible to open RFC accounts if (a) they are holding valid specific
permission/licence from Reserve Bank as on 17th July 1992 to maintain
foreign accounts or to hold other foreign currency assets abroad or (b) they
are in receipt of pension or other monetary benefits from their overseas
employers subsequent to their return to India even if they did not maintain
foreign currency accounts or hold other foreign currency assets abroad.
B.
Persons holding RIFEE permits or Reconversion facility have been given
option to continue those facilities or avail of RFC account facility (cf.
paragraph 12.13). These options can be exercised at one stroke or in part
amounts during the validity period of RIFEE permit or Reconversion facility.
Accordingly, holders of RIFEE permit or Reconversion facility are also
eligible to open RFC accounts.
Explanation: For the purpose of this Scheme -
A person (not being a citizen of Pakistan or Bangladesh) shall be deemed to
be of Indian origin, if,
- he at any time held an Indian passport,
or
- he or either of his parents or any of his grand parents was a citizen of
India by virtue of the Constitution of India or the Citizenship Act, 1955
(57 of 1955),
or
- that person is the spouse of an Indian citizen or of a person of Indian
origin (not being a citizen of Pakistan or Bangladesh).
Eligible Assets
14E.3
Assets acquired or held otherwise than in contravention of the Act by an
eligible person,
while he was resident outside India(non-resident), in the form of deposits
in banks outside India, investments in foreign currency shares or securities
or immovable properties situated outside India or investments in business
etc. outside India and include foreign exchange earnings through employment,
business or vocation outside India taken up or commenced by such person
while he was resident outside India.
Credits
14E.4
Undernoted credit transactions may be allowed in RFC Accounts by authorised
dealers.
- Remittance in convertible foreign currency from outside India through normal
banking channels representing
- Funds in bank accounts outside India forming part of eligible assets held by
the eligible person.
- Income such as dividend, interest, profit, rent, etc. earned on eligible
assets held by the eligible person.
- Sale proceeds of eligible assets.
- Pension or other monetary benefits received from outside India in
convertible foreign currency, through normal banking channels, arising out
of employment taken up outside India by the eligible person prior to his
returning to India.
- Interest earned on RFC account.
- Foreign currency notes/travellers cheques brought into India by the eligible
person, provided that where the amount tendered exceeds US$ 10,000 or its
equivalent or where the value of foreign currency/bank notes exceeds US$
2500 or its equivalent they have been declared on the Currency Declaration
Form (CDF) (cf. papragraph 7D.5).
- Transfers from other RFC accounts of the account holder.
- Balances in any NRE/FCNR Account (other than in NRE rupee accounts of
persons resident in the erstwhile Bilateral Group countries which have been
funded in non-convertible rupees) in the name of the eligible person
standing to his credit at the time of his arrival in India. No penalty would
be payable for premature withdrawal of NRE/FCNR deposits in such cases.
- Unutilised entitlement under any valid RIFEE permit or Reconversion facility
granted by Reserve Bank (See paragraph 12.13).
- Unspent foreign exchange surrendered by the RFC accountholders provided
authorised dealer is satisfied that the concerned foreign exchange/currency
had in fact been released for travel etc. abroad by debit to the same RFC
accounts and the amount of foreign exchange/currency is surrendered within
the stipulated period as required under the Exchange Control regulations.
Debits
14E.5
- The funds in the RFC account may be allowed to be freely utilised by the
account
holder for any bona fide remittance outside India through normal banking
channels including for investments abroad provided the cost of such
investments and/or any subsequent payments required therefor are met out of
RFC account.
- Withdrawals/payments from such accounts, other than for remittances outside
India, or
for payments in foreign currency authorised to be made in India by Reserve
Bank, shall be permitted by the authorised dealer only in equivalent Indian
rupees.
Rate of Interest
14E.6
Rate of interest payable on the funds held in RFC accounts may be decided by
authorised
dealers on the basis of market rates. No interest shall be payable on
balances held in the form of current accounts.
Nomination Facility
14E.7
- RFC accounts shall have the nomination facility as in the case of resident
rupee
accounts.
- On the death of a RFC account holder, the balance in the account may be
repatriated to
nominees to the extent of his/their entitlement, if on the date of death of
the account holder such nominees are resident outside India. To the extent
any nominee is a person resident in India on the date of the death of
account holder, the amount may be paid to him in equivalent Indian rupees.
Reserve Requirements
14E.8
Funds held in RFC accounts are exempt from CRR/SLR requirements.
Loans/Overdrafts against the Deposits
14E.9
No loan/overdraft shall be granted by authorised dealers against balances in
RFC accounts.
Transfer of Balances on becoming Non-resident
14E.10 Funds held in RFC account may be freely remitted
abroad or credited to fresh NRE/FCNR
accounts in the event of the account holder becoming non-resident by virtue
of his going abroad for employment, etc. A monthly statement in form STAT 10
for the bank as a whole may be forwarded to the Chief General Manager,
Exchange Control Department (Central Statistical Division), Reserve Bank of
India, Central Office, Mumbai 400 001 so as to reach him by 10th of the
month following the month to which it relates.
PART F - OTHER FOREIGN CURRENCY ACCOUNTS
Escrow Accounts
14F.1
Under a Counter trade proposal involving adjustment of value of goods
imported into India against
value of exports from India in terms of an arrangement voluntarily entered
into between the Indian party and the overseas party, there is need for an
Escrow Account to be opened with a bank in India. Proposals for opening such
accounts designated in a foreign currency will be considered by Reserve
Bank. Application for permission for opening such an account in the name of
the overseas party should be made by the overseas exporter/organisation
through the authorised dealer with whom the account is proposed to be opened
to the concerned office of Reserve Bank (See paragraph 6A.13).
Foreign Currency Accounts by Exporters
14F.2
Deleted (Please see paragraph 6A.12).
Foreign Currency Accounts by Airline/Shipping Companies
14F.3
Authorised dealers may open foreign currency accounts in the names of
airline/shipping companies
or their agents in India for crediting freight collections from local
exporters/importers (cf. paragraph 8C.4). Withdrawal of funds from such
accounts may be permitted for meeting local expenses of the concerned
airline/shipping company, payment of taxes, etc. or for making remittances
abroad towards surplus passage/ freight collections, operating expenses,
etc. to the extent permitted by Reserve Bank (cf. Part B of Chapter 8).
Foreign Currency Accounts of Overseas Companies executing Projects in India
14F.4
Overseas companies executing projects in India will be permitted, on
application, to open foreign
currency accounts with authorised dealers in India for meeting local
expenses in connection with the projects in India. Applications for the
purpose should be submitted to Reserve Bank, through an authorised dealer,
with full details and copies of the approvals obtained from Government of
India/Reserve Bank for the concerned project.
Foreign Currency Accounts of Overseas Buyers
14F.5
Reserve Bank may consider applications from overseas buyers for opening
foreign currency
accounts with authorised dealers in India provided they are funded by
remittances in any permitted currency from abroad for making payments to
Indian exporters. Authorised dealers should refer such requests to Reserve
Bank with full particulars viz., name and address of the overseas party,
sources of credits and the purpose of opening the account, etc.
Foreign Currency Accounts of Foreign Embassies/Missions/Diplomats
14F.6 Authorised dealers may open foreign currency accounts in India in the
names of Foreign Embassies/Missions/ Diplomats without the approval of
Reserve Bank subject to the following conditions:
- The accounts should be funded by inward remittance in convertible
currencies.
- Funds from such accounts can be utilised for payments for import of goods,
purchases from Bonded Stores, payment of passage fare, etc.
- Funds held in these accounts, if converted in rupees cannot be reconverted
into foreign currency for credit to the accounts.
- The balances in the account may be repatriated/transferred abroad without
the approval of Government of India/Reserve Bank.
- While the accounts of Diplomatic Missions may be maintained in the form of
Current/Fixed Deposit accounts, Foreign Diplomats may maintain
Current/Savings Bank/Fixed Deposit accounts subject to usual terms and
conditions of operating these accounts.
- Rate of interest to be paid on Savings/Term Deposit accounts may be
determined by the banks as in the case of EEFC/RFC accounts.