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Resident Foreign Currency (Domestic) Account - Facility for Resident
Individuals
A.P.
(DIR Series) Circular No. 37 dated 1st November 2002
Authorised
Dealers are aware that in terms of Regulation 3(iii) of RBI Notification No.
FEMA.11/ 2000-RB dated 3rdMay, 2000, residents are allowed to retain up to US$ 2000 or
it�s equivalent in aggregate, provided that such foreign exchange in the form
of currency notes, bank notes and travellers cheques:
(a)
was acquired by him while on a visit to any place outside India by way of
payment for services not arising from any business in or anything done in India;
or
(b)
was acquired by him, 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)
was acquired by him by way of honorarium or gift while on a visit to any
place outside India; or
(d)
represents the unspent amount of foreign exchange acquired by him from an
authorised person for travel abroad.
2.
As a step towards further liberalisation, it has been decided to allow a
person resident in India to 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 from the sources specified at items (a)
to (d) above. Debits to the account shall be for payment towards current/capital
account transactions in accordance with the existing foreign exchange
regulations. The account will be maintained in the form of current account and
shall not bear any interest. Cheque facility will be available. There will be no
ceiling on the balances held in the account.
3.
It is clarified that the facility of opening of RFC (Domestic) Account is
in addition to the existing facility of:
(i)
RFC facility provided under Regulation 5 of Notification No. FEMA 10/
2000-RB dated 3rdMay 2000 and
(ii)
Retention of foreign exchange in cash and/ or travellers cheques up to
US$ 2000 or its equivalent available in terms of
Regulation 3 of Notification No. FEMA 11/ RB-2000 dated 3rdMay 2000.
4.
A Notification amending the relevant provisions of RBI Notification No.
FEMA 10/ RB-2000 dated 3 May 2000 is being issued separately.
5.
Pending publication of the Notification by the Government of India,
requests received by Authorised Dealers for opening of Resident Foreign Currency
(Domestic) Accounts may be forwarded with recommendations to the concerned
Regional Office of the Reserve Bank. While opening these accounts the Authorised
Dealers should however, follow the same procedures, including �Know Your
Customer� guidelines as applicable for opening any other domestic account.
6.
Authorised Dealers may bring the contents of the circular to the notice
of their constituents concerned.
7.
The directions contained in this circular have been issued under Section
10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999 (42 of
1999).
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