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Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2015 ((Amended upto June 01, 2016)

FEMA - 10(R)/2015-RB - Dated:- 21-1-2016 - RESERVE BANK OF INDIA FOREIGN EXCHANGE DEPARTMENT CENTRAL OFFICE MUMBAI 400 001 Notification No. FEMA 10 (R) /2015-RB January 21, 2016 (Amended upto June 01, 2016) Foreign Exchange Management (Foreign currency accounts by a person resident in India) Regulations, 2015 In exercise of the powers conferred by Section 9 and clause (e) of sub-section (2) of section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), and in supersession of Notificati .....

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o 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 .....

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aintained before the commencement of these Regulations by a person resident in India with special or general permission of the Reserve Bank, shall be deemed to be held or maintained under these Regulations: Provided further that the Reserve Bank, may on an application made to it, permit a person resident in India to open or hold or maintain a Foreign Currency Account, subject to such terms and conditions as may be considered necessary. 4. Opening, holding and maintaining Foreign Currency Account .....

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a a Foreign Currency Account, to be known as a Resident Foreign Currency (RFC) Account, out of foreign exchange - a. received as pension or any other superannuation or other monetary benefits from his employer outside India; or b. realised on conversion of the assets referred to in sub-section (4) of section 6 of the Act, and repatriated to India; or c. received or acquired as gift or inheritance from a person referred to in sub-section (4) of section 6 of the Act; or d. referred to in clause (c .....

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of foreign currency balances including any restriction on investment in any form, by whatever name called, outside India. (3) Resident individuals are permitted to include resident relative(s) as joint holder(s) in their Resident Foreign Currency account on former or survivor basis. However, such resident Indian relative joint account holder shall not be eligible to operate the account during the life time of the resident account holder. Explanation- For the purpose of this sub-regulation, the .....

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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 t .....

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roceeds 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) Debits to the account shall be for payments towards a current account transaction in accordance with the provisions of the Foreign Exchange Management (Current Account Transactions) Rules, 2000 and towards a capital account transaction permissible under the Foreig .....

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Economic Zone (SEZ) are credited to such account, b. no foreign exchange purchased in India against rupees shall be credited to the account without prior permission from the Reserve Bank, c. the funds held in the account shall be used for bona fide trade transactions of the unit in the SEZ with the person resident in India or otherwise, d. the balances in the accounts shall be exempt from the restrictions imposed under Rule 5, except item 1(ii) of the Schedule III, of the Government of India No .....

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nd 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 A .....

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h an authorized dealer in India for meeting the local expenses in India of such airline or shipping company: Provided that the credits to such accounts are only by way of freight or passage fare collections in India or from his principal outside India. (2) An authorized dealer in India may, subject to the directions as may be issued by the Reserve Bank, allow ship-manning/ crew managing agencies in India to open and maintain non-interest bearing foreign currency accounts in India for the purpose .....

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India for the projects to be executed in India. (4) An Indian company receiving foreign investment under FDI route in terms of Foreign Exchange Management (Transfer or Issue of security by a Person Resident outside India) Regulations, 2000 dated May 3, 2000, may open and maintain a foreign currency account with an Authorized Dealer in India. Provided that the Indian investee company has impending foreign currency expenditure and the account shall be closed immediately after the requirements are .....

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olding and maintaining a Foreign Currency Account outside India:- (A) Accounts of authorised dealers or their branches (1) An authorised dealer in India may open, hold and maintain with his branch or head office or correspondent outside India, a Foreign Currency Account for the purpose of transacting foreign exchange business and other matters incidental thereto, in accordance with the provisions of the Act or the rules or regulations made or the directions issued thereunder. (2) A branch outsid .....

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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 r .....

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epresentative; and ii. 10 per cent of such average annual sales/ income or turnover during the last financial year where the remittances are made to meet recurring expenses of the branch or office or representative; (c) the overseas branch/ office/ representative shall not enter in any contract or agreement in contravention of the Act, Rules or Regulations made thereunder; (d) the account so opened, held or maintained shall be closed, i. if the overseas branch/ office is not set up within six mo .....

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office is set up or representative posted by a 100% Export Oriented Unit (EOU) or a unit in Export Processing Zone (EPZ) or in a Hardware Technology Park or in a Software Technology Park, within two years of establishment of the Unit. Explanation: For the purpose of this sub-Regulation, 1. Purchase of acquisition of office equipment and other assets required for normal business operations of the overseas branch/ office/ representative will not be deemed as a capital account transaction; 2. Tran .....

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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 Forei .....

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and maintained as per the regulation of the host country. d. The remittances sent to the account by the Indian party should be utilized only for making overseas direct investment into the Joint Venture/ Wholly Owned Subsidiary (JV/ WOS) abroad. e. Any amount received in the account by way of dividend and/ or other entitlements from the subsidiary shall be repatriated to India within 30 days from the date of credit. f. The Indian party should submit the details of debits and credits in the accoun .....

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signed to it in Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations, 2004." 1(E) Accounts in respect of Startups An Indian startup or any other entity as may be notified by the Reserve Bank in consultation with the Central Government, having an overseas subsidiary, may open a foreign currency account with a bank outside India for the purpose of crediting to it foreign exchange earnings out of exports/ sales made by the said entity and/ or the receivables, ari .....

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, 2016 issued by Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of India. 2(F) Other Cases (1) Subject to compliance with the conditions in regard to raising of External Commercial Borrowings (ECB) or raising of resources through American Depository Receipts (ADRs) or Global Depository Receipts (GDRs), the funds so raised may, pending their utilisation or repatriation to India, be held in deposits in foreign currency accounts with a bank outside Indi .....

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xpenditure 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 remittanc .....

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son resident in India who has gone abroad for studies may open, hold and maintain a Foreign Currency Account with a bank outside India during his stay outside India. Provided that all credits from India into the account shall be made in accordance with the Act, Rules and Regulations made thereunder. Provided further that on his return to India, after completion of studies, such an account will deemed to have been opened under the Liberalised Remittance Scheme. (7) A person resident in India who .....

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India of such foreign company may open, hold and maintain a foreign currency account with a bank outside India and receive the whole salary payable to him for the services rendered to the office/ branch/ subsidiary/ joint venture/ group company in India of such foreign company, by credit to such account, subject to payment of taxes, as applicable in India. (ii) A citizen of a foreign State resident in India being in employment with a company incorporated in India may open, hold and maintain a fo .....

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n 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 n .....

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outside India out of his share for meeting the liabilities abroad of the deceased, may apply to the Reserve Bank for such remittance; c. A resident nominee of an account held outside India in accordance with Regulation 5 shall close the account and bring back the proceeds to India through banking channels. 8. Responsibility of authorised dealers maintaining foreign currency accounts:- An authorised dealer maintaining foreign currency accounts shall - a. comply with the directions issued by the R .....

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pecified here under: i) inward remittance through banking channel, other than the remittance received pursuant to any undertaking given to the Reserve Bank or which represents foreign currency loan raised or investment received from outside India or those received for meeting specific obligations by the account holder; ii) payments received in foreign exchange by a 100 per cent Export Oriented Unit or a unit in (a) Export Processing Zone or (b) Software Technology Park or (c) Electronic Hardware .....

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amended from time to time; iv) advance remittance received by an exporter towards export of goods or services; v) payment received for export of goods and services from India, out of funds representing repayment of State Credit in U.S. dollar held in the account of Bank for Foreign Economic Affairs, Moscow, with an authorised dealer in India; (vi) Professional earnings including director s fees, consultancy fees, lecture fees, honorarium and similar other earnings received by a professional by r .....

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ent 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 .....

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of India 3. Permissible debits to the EEFC account Following debits may be made to an EEFC Account, namely - i) Payment outside India towards a current account transaction in accordance with the provisions of the Foreign Exchange Management (Current Account Transactions) Rules, 2000 and towards a capital account transaction permissible under the Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000. ii) Payment in foreign exchange towards cost of goods purchas .....

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Exchange) Regulations, 2000. v) Payment in foreign exchange to a person resident in India for supply of goods/ services including payments for air fare and hotel expenditure. 4. Miscellaneous:- i) There is no restriction on withdrawal in rupees of funds held in an EEFC account. However, the amount so withdrawn in rupees cannot be re-credited to the account. ii) Authorised dealer may issue cheque books of separate series with the superscription "EEFC Account" to the account holders main .....

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s 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 n .....

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s. g. Exporter firms and companies maintaining foreign currency accounts, excluding EEFC accounts, with banks in India or abroad, are not eligible to open Diamond Dollar Accounts. 2. Permissible Credits:- i. Amount of pre-shipment and post-shipment finance availed in US Dollars. Ii. Realisation of export proceeds from shipments of rough, cut, polished diamonds and diamond studded jewellery. iii. Realisation in US Dollars from local sale of rough, cut and polished diamonds. 3. Permissible Debits: .....

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me to time. 4. Application Procedure:- The exporter firm/ company shall make an application in the format annexed to the AD Category - I bank for opening of the DDA. AD Category - I banks should assess the track record of the firm / company at the end of every licensing year (April-March). In case any firm/ company fails to meet the eligibility criteria, the account may be closed immediately. APPLICATION FOR OPENING DIAMOND DOLLAR ACCOUNT/S To, The Branch Manager/ (name & address of AD bank/ .....

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s under the Diamond Dollar Account Scheme with your bank in accordance with the provisions of (mention the relevant paragraph) of the Foreign Trade Policy (period e.g. 2009-2014) of the Government of India read with the Handbook of Procedures (mention the relevant Volume No.) issued by Ministry of Commerce & Industry, Government of India. 3. The relevant particulars are furnished below: i) Name of the Firm / Company: ii) Address of the Registered Office: iii) Principal business: iv) IE Code .....

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