In India, a Resident Individual can maintain 3 types of Foreign Currency (FC) Accounts for putting through the bona fide transactions..
-Exchange Earners Foreign Currency (EEFC) Account
-Resident Foreign Currency (Domestic) [RFC(D)] Account
-Resident Foreign Currency (RFC) Account
Q 1. Define Foreign Currency Account (FC Account)?
Ans: The account which may be held/maintained in any type of currencies except the currency of below mentioned countries:
(i) India
(ii) Nepal
(iii) Bhutan.
Q 2. In which form, the PRI (Person Resident in India) can open, held & maintain the FC Account?
Ans: The Foreign Currency Accounts may be opened/ held/maintained in the following forms:
(i) Savings
(ii) Current
(iii) Term Deposits
Q 3. Whether the FC Account can be opened by Resident Individual outside India?
Ans: Yes, in the following situations Foreign Currency Account may be opened by RI outside India:
EXCHANGE EARNERS FOREIGN CURRENCY ACCOUNT (EEFC A/C):
Q 1. Who is eligible to open this EEFC A/c?
Ans: Only Foreign Exchange Earners is eligible to open this A/c whether they are
(i) Individual
(ii) Companies etc.
Q 2. In which form EEFC A/c may be opened?
Ans: It can be opened in the Current form only.
Q 3. What are the permissible credits under this A/c?
Ans: The following 8 types of credits permitted by the RBI:
(i) Any Foreign Exchange Earner may receive 100% foreign exchange on account of export transactions.
(ii) Any Exporter may receive advance remittance towards export of Goods/Services.
(iii) Recovery of loan amount which has been given to foreign importers.
(iv) Disinvestment proceeds on conversion of ADR/GDR.
(v) professional earnings like director’s/ consultancy/ lecture fees, honorarium and similar other earnings received by a professional by rendering services in his individual capacity
(vi) Interest earned on the funds held in the account
(vii) Re-credit of unutilised foreign currency earlier withdrawn from the account
(viii) Payments received in foreign exchange by an Indian start-up arising out of sales/ export made by the start-up or its overseas subsidiaries.
Q 4. Which types of debit permitted under this A/c?
Ans: There are 4 types of permissible debits:
- Any permissible current or capital account transactions.
- The amount can be used for payment of Custom Duty.
- For payment of goods purchased.
- For Trade related Loans & Advances.
Q 5. Can Foreign Exchange Earner open/hold/maintain this account jointly with someone?
Ans: Yes, this account may be opened jointly:
- With Eligible Persons
- With Resident Relatives (Relative defined as per the Companies Act, 2013)
Condition: During the lifetime of the account holder, this account cannot be operated through the Relative joint account holder.”
Q 6. Whether any interest is payable on this A/c?
Ans: This A/c is in the nature of Non-interest earning. So, no interest is payable on this A/c.
RESIDENT FOREIGN CURRENCY (DOMESTIC) ACCOUNT [RFC(D) A/C]:
Q 1. Who is eligible to open this A/c?
Ans: Only Individuals can open this A/c.
Q 2. In which form this A/c may be opened?
Ans: It can be opened in the any Current form only.
Q 3. What are the permissible credits under this A/c?
Ans: There are the 6 types of credits permitted by the RBI:
(i) A/c holder can receive the gift from close relative.
(ii) Earning through export of goods/ services, royalty.
(iii) Foreign exchange received as payment/ service/ gift/ honorarium while on visit abroad or from a non-resident who is on a visit to India
(iv) Unspent amount of foreign exchange acquired from AD for travel abroad
(v) foreign exchange received as earnings of LIC claims/ maturity/ surrendered value settled in forex from an Indian insurance company
(vi) A/c holder can receive the proceeds on conversion of shares into ADR/GDR.
Q 4. Which types of debit permitted under this A/c?
Ans: The amount held in this account can be used for any Permissible Current/Capital Account Transactions.
Q 5. May Individual open/hold/maintain this account jointly with someone?
Ans: Yes, this account may be opened jointly with any Eligible Person.
Q 6. Whether any interest is payable on this A/c?
Ans: This A/c is in the nature of Non-interest earning. So, no interest is payable on this A/c.
Q 7. Is there any Cheque Facility available?
Ans: Yes, the account holder can avail the cheque facility for operation of this A/c.
RESIDENT FOREIGN CURRENCY ACCOUNT [RFC A/C]:
Q 1. Who can open this A/c?
Ans: Only Individuals can open this A/c.
Q 2. In which form this A/c may be opened?
Ans: It can be opened in the any form:
- Current
- Savings
- Term Deposits
Q 3. What are the permissible credits under this A/c?
Ans: There are the 7 types of credits permitted by the RBI:
(i) Foreign exchange received by Individual as superannuation/ other monetary benefits from overseas employer
(ii) Foreign exchange realised on conversion of the assets referred to in Sec 6(4) of FEMA
(iii) Gift/ inheritance received from a person referred to in Sec 6(4) of FEMA
(iv) Foreign exchange acquired before the July 8, 1947 or any income arising on it held outside India with RBI permission
(v) Foreign exchange received as earnings of LIC claims/ maturity/ surrendered value settled in forex from an Indian insurance company
(vi) Balances in NRE/ FCNR (B) accounts on change in residential status
Q 4. Which types of debit permitted under this A/c?
Ans: Under this A/c, there is no any restriction on utilisation whether In India or Outside India imposed by the RBI.
Q 5. May Individual open/hold/maintain this account jointly with someone?
Ans: Yes, this account may be opened jointly:
- With any Eligible Persons
- With Resident Relatives (Relative defined as per the Companies Act, 2013)
Condition: During the lifetime of the account holder, this account cannot be operated through the Relative joint account holder.”
Q 6. What is the nature of this EEFC A/c in terms of interest?
Ans: De-regulated (As decided by the AD Bank).
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