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Financial Inclusion and Date: 16/01/2025
Development
Foreign Currency Accounts by Resident Individuals
Financial Market
Foreign Exchange (As on January 16, 2025)
Management
These FAQs attempt to put in place the common queries that
Consumer Education
and Protection
users have on the subject in easy to understand language.
However, for conducting a transaction, the Foreign Exchange
Issuer of Currency Management Act, 1999 (FEMA) and the Regulations made or
Payment and directions issued thereunder may be referred to. The relevant
Settlement System principal regulations are the Foreign Exchange Management
Research (Foreign Currency Accounts by a Person Resident in India)
Regulations, 2015 issued vide Notification No. FEMA 10(R)/2015-
Others
RB dated January 21, 2016. The directions issued are
Deposit Insurance and consolidated in Part I of the Master Direction No 14 on Deposits
Credit Guarantee and Accounts. Amendments, if any, to the principal regulations
Corporation
are appended.
Q1. Who is a person resident in India?
Q2. What is a foreign currency account?
Q3. What are the major foreign currency accounts that can be
opened in India by a resident individual?
Q4. In what form can a foreign currency account in India be
opened?
Q5. When can a resident individual open a foreign currency account
outside India?
Q6. Can a resident continue to maintain an account outside India
which was opened by him when he was a non-resident?
Q7. What is the status of the account held outside India on the
demise of the account holder?
Q1. Who is a person resident in India?
Answer: Sec 2(v) of the Foreign Exchange Management Act,
1999 (FEMA) defines a person resident in India as:
(i) a person residing in India for more than one hundred and
eighty-two days during the course of the preceding financial
year but does not include-
(A) a person who has gone out of India or who stays outside
India, in either case-
a. for or on taking up employment outside India, or
b. for carrying on outside India a business or vocation
outside India, or
c. for any other purpose, in such circumstances as would
indicate his intention to stay outside India for an
uncertain period;
(B) a person who has come to or stays in India, in either case,
otherwise than-
a. for or on taking up employment in India, or
b. for carrying on in India a business or vocation in India,
or
c. for any other purpose, in such circumstances as would
indicate his intention to stay in India for an uncertain
period;
(ii) any person or body corporate registered or incorporated
in India,
(iii) an office, branch or agency in India owned or controlled
by a person resident outside India,
(iv) an office, branch or agency outside India owned or
controlled by a person resident in India;
Q2. What is a foreign currency account?
Answer: A Foreign Currency Account is an account held or
maintained in currency other than the currency of India or
Nepal or Bhutan.
Q3. What are the major foreign currency accounts that can
be opened in India by a resident individual?
Answer: Some of the foreign currency accounts that can be
opened by resident individuals with an Authorised Dealer
bank in India, along with their features are given below:
Resident
Exchange Foreign Resident
Earners Foreign Currency Foreign
Particulars
Currency (Domestic) Currency
(EEFC) Account [RFC(D)] (RFC) Account
Account
Who can
Exchange
open the Individuals Individuals
Earners
account
Joint Jointly with Jointly with any Same as EEFC
account eligible persons; person eligible
to open the
or
With resident
relative(s) on
former or
survivor’ basis.
Relative as
defined under
Companies Act,
2013 (viz.
members of HUF,
spouse, parents,
step-parents,
son, step-son,
daughter-in-law,
daughter, son-in-
law,
brother/sister,
step-brother/
step-sister)
Relative joint
account holder
cannot operate
the account
during the life
time of the
account holder
Type of Current only Current only Current/
Account savings/ term
deposits
Interest Non-interest Non-interest De-regulated
earning earning (As decided by
the AD bank)
Permitted 1) 100% of 1) Foreign 1) Foreign
Credits foreign exchange exchange exchange
received on received as received by him
account of payment/ as
export service/ gift/ superannuation/
transactions. honorarium other monetary
while on visit benefits from
2) advance abroad or from overseas
remittance a non-resident employer
received by an who is on a visit
exporter towards to India 2) Foreign
export of goods exchange
or services 2) Unspent realised on
amount of conversion of
3) Repayment of foreign the assets
loans given to exchange referred to in
foreign importers acquired from Sec 6(4) of
AD for travel FEMA
4) Disinvestment abroad
proceeds on 3) Gift/
conversion of 3) Gift from inheritance
ADR/ GDR close relative received from a
person referred
5) professional 4) Earning to in Sec 6(4) of
earnings like through export FEMA
director’s/ of goods/
consultancy/ services, royalty 4) Foreign
lecture fees, exchange
honorarium and 5) acquired before
similar other Disinvestment the July 8, 1947
earnings received proceed on or any income
by a professional conversion of arising on it held
by rendering shares into outside India
services in his ADR/ GDR with RBI
individual 6) foreign permission
capacity exchange 6) Foreign
6) Interest received as exchange
earned on the earnings of LIC received as
funds held in the claims/ earnings of LIC
account maturity/ claims/
surrendered maturity/
7) Re-credit of value settled in surrendered
unutilised foreign forex from an value settled in
currency earlier Indian forex from an
withdrawn from insurance Indian insurance
the account company company
8) Payments 7) Balances in
received in NRE/ FCNR (B)
foreign exchange accounts on
by an Indian change in
startup arising residential
out of sales/ status
export made by
the startup or its
overseas
subsidiaries
Permitted 1) Any Can be used for No restrictions
Debits permissible any permissible on utilisation in/
current or capital current/ capital outside India.
account account
transaction transactions.
2) Cost of goods
purchased
3) Customs duty
4) Trade related
loans and
advances
Q4. In what form can a foreign currency account in India be
opened?
Answer: Unless otherwise specifically stated in the features
of the account, a foreign currency account maintained by a
person resident in India with an authorized dealer in India can
be opened, held and maintained 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. The account can be
held singly or jointly in the name of person eligible to open,
hold and maintain such account.
Q5. When can a resident individual open a foreign currency
account outside India?
Answer: A resident individual can open a foreign currency
account with a bank outside India in the following cases:
1) A resident student who has gone abroad for studies for
the period of stay abroad. All credits to the account from
India should be made in accordance with FEMA and the rules
and regulations made thereunder. On the student’s return to
India after completion of studies, the account will be deemed
to have been opened under the Liberalised Remittance
Scheme (LRS).
2) A resident who is on a visit to a foreign country for the
period of stay abroad. The balance in the account should be
repatriated to India on return of the account holder to India.
3) A person going abroad to participate in an exhibition/
trade fair for crediting the sale proceeds of goods. The
balance should be repatriated to India within one month from
the date of closure of the exhibition/ trade fair.
4) A resident individual, being an exporter, for realisation of
full export value and receipt of advance remittance by the
exporter towards export of goods or services.
5) The following persons for remitting/ receiving their entire
salary payable to them in India:
a. A foreign citizen resident in India, who is an employee
of a foreign company and is on deputation to the office/
branch/ subsidiary/ joint venture/ group company in
India;
b. An Indian citizen who is an employee of a foreign
company and is on deputation to the office/ branch/
subsidiary/ joint venture/ group company in India; and
c. A foreign citizen who is a resident in India and is
employed with an Indian company.
6) For the purpose of sending remittances under the
Liberalized Remittance Scheme.
Q6. Can a resident continue to maintain an account outside
India which was opened by him when he was a non-
resident?
Answer: A person resident in India may maintain a foreign
currency account outside India if he had opened it when he
was resident outside India or inherited it from a person
resident outside India.
Q7. What is the status of the account held outside India on
the demise of the account holder?
Answer: A resident nominee of an account held outside India
has to close the account and bring back the proceeds to
India through banking channels
Amendments to the Principal Regulations
1. Notification No. FEMA 10 (R)/(1)/2016-RB dated June 1, 2016
2. G.S.R. No.570(E) dated 01.06.2018
3. G.S.R. No.160(E) dated 27.02.2019
4. Notification No. FEMA 10(R)(2)/2019-RB dated February 27, 2019
5. Notification No. FEMA 10(R)(3)/2024-RB dated April 19, 2024
6. Notification
© Reserve Bank of India. All Rights Reserved. No. FEMA
Best 10(R)(5)/2025-RB dated
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resolution 2025
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