Facilities to returning Indians w.r.t. RFC Scheme Assets

 

  1. What is the Resident Foreign Currency (RFC) Account Scheme?
  2. Is any permission from Reserve Bank required for opening such accounts with authorized dealers?
  3. In which currencies can RFC accounts be maintained?
  4. What funds can be credited to RFC accounts of Returning Indians?
  5. Can income received from their overseas assets in the form of dividends etc. or sale proceeds of such assets be credited to RFC accounts?
  6. Can pension received by the account holder from abroad be credited to his RFC account?
  7. NRIs returning to India for permanent settlement were granted RIFEE facility. Is this facility still available?
  8. Can funds in RFC accounts be remitted abroad?
  9. Can funds in RFC accounts be utilized for local payments?
  10. Can a Returning Indian desiring to go abroad again for employment ,business or vocation transfer his funds in RFC account to NRE/FCNR account?
  11. Can persons who have returned to India after a short assignment of less than one year open RFC accounts?

 

Ans.I

This is a Scheme approved by Reserve Bank permitting persons of Indian nationality or origin, who have returned to India on or after 18th April 1992 for permanent settlement (Returning Indians), after being resident outside India for a continuous period of not less than one year, to open foreign currency accounts with banks in India for holding funds brought by them to India. Persons who have returned to India before 18th April 1992 can also open RFC account if (a) they are holding foreign currency assets abroad with Reserve Bank's permission or (b) they are in receipt of pension or other monetary benefits from their erstwhile employers abroad.

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Ans.II

No.

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Ans.III

RFC accounts can be maintained in any convertible currency.

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Ans.IV

The entire amount of foreign exchange brought to India at the time of their return to India for permanent settlement as well as the balances standing to the credit of their NRE and FCNR accounts at the time of return can be credited to RFC accounts. However, the foreign exchange brought to India in the form of foreign currency notes/bank notes/travellers cheques should have been declared to Customs at the time of arrival on the Currency Declaration Form( CDF) if it exceeded U.S. $ 10,000 or its equivalent. In the case of foreign currency/bank notes, such a declaration on form CDF is compulsory if the amount exceeds U.S. $ 2,500 or its equivalent.

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Ans.V

Yes. The entire income from such assets or sale proceeds of such assets repatriated to India can be credited to RFC accounts.

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Ans.VI

Yes. The entire amount of pension received from abroad can be credited to his RFC account.

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Ans.VII

No.RIFEE facility has been replaced by the RFC accounts facility.

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Ans.VIII

Yes. Funds in RFC accounts can be remitted abroad for any bona fide purpose of the account holder or his dependents including exchange required for travel and other personal purposes and investments.

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Ans.IX

Yes. Funds in RFC accounts can be withdrawn freely for local payments in rupees.

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Ans.X

Yes.

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Ans.XI

Their applications for opening such accounts would be considered by Reserve Bank. Persons who have gone abroad for studies, training ,etc. are, however, not eligible for this facility.

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