Foreign currency bank account
Querist :
Anonymous
(Querist) 30 September 2011
This query is : Resolved
Are individual Indian citizens allowed maintain a foreign currency savings bank account/current account or fixed deposit account in India or abroad to help them hedge the risk of depreciation in value of Indian Rupee?
malipeddi jaggarao
(Expert) 30 September 2011
No individual Indian citizens resident Indians (Not NRIs) are permitted to maintain any account in foreign currency. If you wish to hedge the risk of depreciation in vaue of Indian Rupee for a particular future transaction, you can resort to derivatives like forward contracts covering the particular transaction.
Guest
(Expert) 30 September 2011
As per RBI Guidelines --
To avoid exchange loss on conversion of foreign exchange into Indian Rupee & Rupee into foreign exchange, residents can retain upto 50% of foreign currency remittances received from abroad in a foreign currency account, viz., EEFC account, with an authorised dealer in India. Funds held in EEFC account can be utilised for current account transactions and also for approved capital account transactions as specified by the extant Rules/Regulations/Notifications/Directives issued by the Government/RBI from time to time.
A person resident in India can open, hold and maintain with an authorized dealer in India, a Resident Foreign Currency (Domestic) Account, called RFC (Domestic) Account, out of foreign exchange acquired in the form of currency notes, Bank notes and travellers cheques from any of the sources like, payment for services rendered abroad, as honorarium, gift, services rendered or in settlement of any lawful obligation from any person not resident in India. The account may also be credited with/opened out of foreign exchange earned like proceeds of export of goods and/or services, royalty, honorarium, etc., and/or gifts received from close relatives (as defined in the Companies Act) and repatriated to India through normal banking channels by resident individuals.
Sailesh Kumar Shah
(Expert) 30 September 2011
Thanks to Shri PS Dhingra, enabling me enhance my knowledge.
Guest
(Expert) 30 September 2011
You are welcome Shailesh.
malipeddi jaggarao
(Expert) 01 October 2011
I also agree with Mr.Dhingra, but EEFC and RFC accounts can not be opened by every resident Indian to hedge the exchange risk. Only certain categories who are Exchange earners/who returned to India (change of NRI status) are only allowed to open these accounts.
Guest
(Expert) 01 October 2011
Dear Jaggarao,
Not for the sake of argument, but for the sake of clarity, I would like to suggest you to go through the RBI guidelones before providing your final views.
