TMI BlogForeign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2015 ((Amended upto June 01, 2016)X X X X Extracts X X X X X X X X Extracts X X X X ..... eign Currency Accounts by a person resident in India) Regulations, 2015. ii) They shall come into force from the date of their publication in the official gazette. 2. Definitions:- In these Regulations, unless the context otherwise requires, - i) 'Act' means the Foreign Exchange Management Act, 1999 (42 of 1999) ; ii) 'Authorised dealer' means a person authorised as an authorised dealer under sub-section (1) of section 10 of the Act ; iii) 'Foreign Currency Account' means an account held or maintained in currency other than the currency of India or Nepal or Bhutan; iv) 'Schedule' means schedule to these Regulations; v) the words and expressions used but not defined in these Regulations shall have the same meanings respectively assigned to them in the Act. 3. Restriction on holding foreign currency account by a person resident in India:- Save as otherwise provided in the Act or rules or regulations made there under, no person resident in India shall open or hold or maintain a foreign currency account: Provided that a Foreign Currency Account held or maintained before the commencement of these Regulations by a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the account during the life time of the resident account holder. Explanation For the purpose of this sub-regulation, the expression relative shall have the same meaning as assigned to it under section 2(77) of the Companies Act, 2013 . (C) Resident Foreign Currency (Domestic) Account (1) A resident Individual may open, hold and maintain with an Authorised Dealer in India a foreign currency account, to be known as Resident Foreign Currency (Domestic) Account, out of foreign exchange acquired in the form of currency notes, bank notes and travellers cheques as under: a. by way of payment for services not arising from any business in or anything done in India while on a visit to any place outside India; or b. from any person not resident in India and who is on a visit to India, as honorarium or gift or for services rendered or in settlement of any lawful obligation; or c. by way of honorarium or gift while on a visit to any place outside India; or d. in the form of unspent amount of foreign exchange acquired by him from an authorised person for travel abroad; or e. as gift from a relative; Explanation - For the purpose of this sub-regu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia may allow firms and companies who comply with the eligibility criteria stipulated in the Foreign Trade Policy of Government of India, in force from time to time and the directions as may be issued by Reserve Bank of India, from time to time, to open, hold and maintain Diamond Dollar Accounts (DDAs) in India subject to the terms and conditions of the DDA Scheme specified in Schedule II. (F) Exporters A person resident in India, being an exporter who has undertaken a construction contract or a turnkey project outside India or who is exporting services or engineering goods from India on deferred payment terms may open, hold and maintain a Foreign Currency Account with a bank in India, provided that - a. approval as required under the Foreign Exchange Management (Export of goods and services) Regulations, 2015 has been obtained for undertaking the contract/ project/ export of goods or services, and b. the terms and conditions stipulated in the letter of approval have been duly complied with. (G) Other cases (1) The Indian agent of a shipping or an airline company incorporated outside India, may open, hold and maintain a Foreign Currency Account with a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordance with the provisions of the Act or the rules or regulations made or the directions issued thereunder. (2) A branch outside India of a bank incorporated or constituted in India may open, hold and maintain with a bank outside India, a Foreign Currency Account for the purpose of carrying on normal banking business outside India, subject to compliance with the directions or guidelines issued from time to time by the Reserve Bank, and the regulatory authority in the country where the branch is located. (B) Account by a company/ firm in the name of its office/ branch/ representative outside India A firm or a company or a body corporate registered or incorporated in India (hereinafter referred to as the Indian entity ) may open, hold and maintain in the name of its office (trading or non-trading) or its branch set up outside India or its representative posted outside India, a foreign currency account with a bank outside India by making remittances from India for the purpose of normal business operations of the office/ branch or representative; Provided that (a) the overseas branch/ office has been set up or representative is posted overseas for conducting normal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstruction contract or a turnkey project outside India or who is exporting services or engineering goods from India on deferred payment terms may open, hold and maintain a Foreign Currency Account with a bank outside India, provided that - a. approval as required under the Foreign Exchange Management (Export of goods and services) Regulations, 2015 has been obtained for undertaking the contract/ project/ export of goods or services, and b. the terms and conditions stipulated in the letter of approval have been duly complied with. (D) For making Overseas Direct Investment An Indian party may open, hold and maintain Foreign Currency Account abroad for the purpose of making overseas direct investments subject to the following terms and conditions: a. The Indian party is eligible for making overseas direct investment in terms of Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations, 2004 as amended from time to time b. The host country regulations stipulate that the investment into the country is required to be routed through a designated account. c. The account shall be opened, held and maintained as per the regulatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir utilisation or repatriation to India, be held in deposits in foreign currency accounts with a bank outside India. (2) A shipping or airline company incorporated in India may open, hold and maintain with a bank outside India, a Foreign Currency Account for the purpose of undertaking transactions in the ordinary course of its business. (3) 3Insurance/ reinsurance companies registered with Insurance Regulatory and Development Authority of India (IRDA) to carry out insurance/ reinsurance business may open, hold and maintain a Foreign Currency Account with a bank outside India for the purpose of meeting the expenditure incidental to the insurance/ reinsurance business carried on by them and for that purpose, credit to such account the insurance/reinsurance premia received by them outside India. (4) Resident individuals may open, maintain and hold foreign currency accounts with a bank outside India for making remittances under the Liberalised Remittance Scheme (hereinafter referred to as the Scheme ). The account may be used for putting though all transactions connected with or arising from remittances eligible under this Scheme (5) A person resident in India who has g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts:- Unless otherwise specified in these Regulations, a Foreign Currency Account with an authorised dealer in India under these Regulations may be opened, held and maintained: a. 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: Provided that the EEFC account referred to in Regulation 4 (A), shall be opened, held or maintained in a manner as prescribed by the Reserve Bank from time to time. b. singly or jointly in the name of person eligible to open, hold and maintain such account. 7. Remittances out of the account after the account holder's death:- On the death of a foreign currency account holder, - a. the authorised dealer with whom the account is held or maintained may remit to a nominee being a person resident outside India, funds to the extent of his share or entitlement from the account of the deceased account holder; b. a nominee being a person resident in India, who is desirous of remitting funds outside India out of his share for meeting the liabilities abroad of the deceased, may apply to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lecture fees, honorarium and similar other earnings received by a professional by rendering services in his individual capacity. 4 (vii) Payments received in foreign exchange by an Indian startup, or any other entity as may be notified by the Reserve Bank in consultation with the Central Government, arising out of exports/ sales made by the said entity or its overseas subsidiaries, if any. Explanation: For the purpose of this schedule a startup means an entity which complies with the conditions laid down in Notification No. G.S.R 180(E) dated February 17, 2016 issued by Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of India. (2) For the purpose of the sub-paragraph (1), payment received through an international credit card for which reimbursement will be provided in foreign exchange may be regarded as a remittance through banking channels. 2. Permissible credits to EEFC account Following credits may be made to an EEFC Account, namely i) Inward remittance/ payment received by the recipient in foreign exchange subject to the provisions of paragraph (1); ii) Interest earned on the funds held in the account; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount holder. Explanation For the purpose of this sub-regulation, relative means relative as defined in section 2(77) of the Companies Act, 2013. Schedule II (See Sub regulation (E) of Regulation 4) Diamond Dollar Account (DDA) Scheme 1. Firms and companies may open and maintain DDA with AD Category I banks, subject to the following terms and conditions:- a. The exporter should comply with the eligibility criteria stipulated in the Foreign Trade Policy of the Government of India, issued from time to time. b. The DDA shall be opened in the name of the exporter and maintained in US Dollars only. c. The account shall only be in the form of current account and no interest should be paid on the balance held in the account. d. No intra-account transfer should be allowed between the DDAs maintained by the account holder. e. An exporter firm/ company shall be permitted to open and maintain not more than 5 DDAs. f. The balances held in the accounts shall be subject to Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) requirements. g. Exporter firms and companies maintaining foreign currency accounts, exclud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of the Firm / Company: ii) Address of the Registered Office: iii) Principal business: iv) IE Code No.: v) Annual Turnover of the last two Years (enclose certificate of CA): vi) Details of the EEFC account, if any : 4. We confirm that we are not maintaining any foreign currency account, excluding EEFC account, with banks in India or abroad. 5. We declare that we are not maintaining more than 5 DDAs including the one proposed to be opened with your branch. 6. We declare that we are neither on the caution list of exporters of Reserve Bank of India nor on the defaulters list of Export Credit Guarantee Corporation of India Ltd (ECGC). 7. We undertake to abide by the rules of the Diamond Dollar Account Scheme framed / to be framed from time to time and the terms and conditions stipulated for opening and maintenance of the DDA with your bank and any other foreign exchange / foreign trade regulation of Reserve Bank of India / Government of India. We request you to open a Diamond Dollar Account/s in the name of the firm/company. (Signature of the Authorized Official of the firm / company) Name : Designation : Seal of firm / company : Date : ..... X X X X Extracts X X X X X X X X Extracts X X X X
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