|
FOREIGN EXCHANGE MANAGEMENT (FOREIGN CURRENCY ACCOUNTS BY A PERSON
RESIDENT IN INDIA) REGULATIONS, 2000
Notification
No. 10 dated 3rd May 2000
GSR
393 (E), dated 3.5.2000 (As amended by FEMA notification no. 27 dated 14th
August 2000, FEMA Notification No. 34 dated 22nd January 2001, FEMA
Notification No. 37 dated 27th February 2001, FEMA Notification No.
47 dated 5th December 2001 ): 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), the Reserve Bank of India
makes the following regulations for opening, holding and maintaining of Foreign
Currency Accounts and the limits up to which amounts can be held in such
accounts by a person resident in India, namely: -
(I)
These Regulations may be called the Foreign Exchange Management (Foreign
Currency Accounts by a person resident in India) Regulations, 2000.
(II)
They shall come into force on 1st day of June 2000.
In
these Regulations, unless the context otherwise requires: -
(i)
�Act� means the Foreign Exchange Management Act, 1999 (42 0f 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 a schedule to those Regulations;
(v)
The words and
expressions used but not defined in these regulations shall have the same
meaning respectively assigned to them in the Act.
Save
as otherwise provided in the act or rules or regulations made thereunder, 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 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 an Exchange Earner�s Foreign
Currency Account:
A
person resident may open, hold and maintain with an authorised dealer in India,
a foreign Currency Account to be known as Exchange Earner�s Currency (EEFC)
Account, subject to the terms and conditions of the Exchange Earner�s Foreign
Currency Accounts Scheme specified in the Schedule.
(1)
A person resident in India may open, hold and maintain with an authorised
dealer in India 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) of section 9 of the Act, or acquired as gift or
inheritance therefrom.
(2)
The funds in a Resident Foreign Currency Account opened or held or
maintained in terms of sub-regulation (I) shall be free from all restrictions
regarding utilisation of foreign currency balances including any restriction on
investment in any form, by whatever name called, outside India;
6.
Opening, holding and maintaining a Foreign Currency Account in India in
certain others cases:
A
shipping or airline company incorporated outside India or its agent in India may
open, hold and maintain a Foreign Currency Account which an authorised 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 by inward remittances through normal banking channels
from its office outside India and, in the case of agent, from his principal
outside India.
7.
Opening, holding and maintaining a Foreign Currency Account outside
India:
(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 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.
(3)
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.
(4)
Life Insurance Corporation of
India or General Insurance Corporation of India and its subsidiaries may open,
hold and maintain with a bank outside India, a Foreign Currency Account for the
purpose of meeting the expenditure incidental to the insurance business carried
on by them and for the purpose, credit to such account the insurance premia
received by them outside India.
(4A) A firm or a company or a body corporate registered or
incorporated 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 business activities
of the Indian entity;
(b) the total remittances made under this
sub-Regulation by the Indian entity, to all such accounts in an accounting year
shall
not exceed:
(i) 2 percent of the average annual sales/ income or
turnover during last two accounting years of the Indian entity, where the
remittances are made to meet initial expenses of the branch or office or
representative, and
(ii) 1 percent of the such average annual sales/ income or
turnover where the remittances are made to meet recurring expenses of the branch or office
representative;
(c) the overseas branch/ office/
representative shall not enter in any contract or agreement in contravention of
the Act, Rules or
Regulation made thereunder.
(d) the account so opened, held or
maintained shall be closed:
(a) if the overseas branch/ office is not set up within six
months of opening the accounts, or
(b) within one month of closure of the overseas branch/
office, or
(c) where no representative is posted for six months,
and the balance held in the account
shall be repatriated to India:
Provided
further that the restriction contained in clause (b) of the first proviso
shall not apply in a case where -
(a) the remittances to the account
maintained under this sub-Regulation are made out of funds held in EEFC account
of the
Indian entity, or
(b) the overseas branch/ office is set up
or representative posted by 100% EOU or a unit in EPZ or in Hardware Technology
Park
or in a Software Technology Park, within two years of establishment of
the unit.
Explanation:
For the purposes of this sub-Regulation,
(A)
Purchase or acquisition of office equipments and other assets required for
normal business operations of the overseas branch/ office/ representative will
not be deemed as a capital account transaction;
(B)
Transfer or acquisition of immovable property outside India, other than by way
of lease not exceeding five years, by the overseas branch/ office/
representative will be subject to the Foreign Exchange Management (Acquisition
and Transfer of Immovable Property outside India) Regulations, 2000.
(5)
A person resident in India, being an exporter who has undertaken a
construction contract or 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 out side India,
provided that-
(a)
approval as required under the Foreign Exchange Management (Export of
Good and Services) Regulations, 2000 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.
(6)
A person resident in India who
has gone abroad for studies or who is on a visit to a foreign country may open,
hold and maintain a Foreign Currency Account with a bank outside India during
his stay outside India, provided that on his return to India, the balance in the
account is repatriated to India:
Provided
that short visits of India by a person who has gone abroad for studies,
before completion of his studies, shall not be treated as his return to India.
(7)
A person resident in India who has gone out of India to
participate in an exhibition / trade fair outside India may open, hold and
maintain a Foreign Currency Account with a bank outside India for crediting the
sale proceeds of goods on display in the exhibition/ trade fair:
Provided
that the balance in the account is repatriated to India through normal
banking channels within a period of one month from the date of closure of the
exhibition/ trade fair.
(8)
A national of a foreign state resident in India being an employee of a
foreign company on deputation to the office/ branch/ subsidiary/ joint venture
in India of such foreign company may open, hold and maintaina
foreign currency account with a bank outside India and receive the salary
payable to him for the services rendered to the office/ branch/ subsidiary/
joint venture in India of such foreign company, by credit to such account;
Provided
that:
(i)
the amount to be credited to such account shall not exceed 75 percent of
the salary accrued to or received by such person from the foreign company;
(ii)
the remaining salary shall be paid in rupees in India;
(iii)
Income tax chargeable under the Income Tax Act 1961 is paid on the entire
salary as accrued in India.
Unless
otherwise stipulated by the Reserve Bank, a person resident in India who has
opened and is maintaining a Foreign Currency Account in accordance with the
provision of Regulations 6 and 7, may hold therein foreign exchange without any
limit.
A
Foreign Currency Account with an authorised dealer in India under these
Regulations may be opened, held and maintained-
(1)
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, shall be opened, held and
maintained in the form of a non-interest bearing current account only.
(2)
Singly or jointly in the name
of person eligible to open, hold and maintain such account.
On
the death of a foreign currency account holder, -
(1)
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 holders.
(2)
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
Reserve Bank for such remittance.
An
authorised dealer maintaining foreign currency accounts shall -
(1)
Comply with the direction issued by the Reserve Bank from time to time;
and
(2)
Submit
periodic return of statement, if any, as may be stipulated by the Reserve Bank.
SCHEDULE
(See Regulation 4)
Exchange
Earner�s Foreign Currency (EEFC) Account Scheme
(1)
A 100 percent Export Oriented Unit or a Unit in (a) Export Processing
Zone or (b) Software Technology Park or (c) Electronic Hardware Technology Park
may credit up to 70 percent, and any other person resident in India may credit
up to 50 per cent of the following, to the EEFC Account, namely �
(i)
Inward remittance through normal 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 by the account holder;
(ii) Payments received in foreign exchange
by a100 per cent Export Oriented Unit or a unit in (a) Export Processing Zone or
(b) Software Technology Park or (c) Electronic Hardware Technology Park for
supply of goods to similar such unit or to a unit in Domestic Tariff Area;
(iii) Payment received by an exporter from an
account maintained with an authorised dealer for the purpose of counter trade in
accordance with the approval granted in terms of Regulation 14 of the Foreign
Exchange Management (Export of Goods and Services) Regulations 2000;
(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:
Provided
that the Reserve Bank may, on an application made to it and on being satisfied
that it is necessary to do so, grant permission to hold higher percentage of
inward remittance / payments in foreign exchange in the EEFC account.
(2)
Except to the extent provided in sub paragraph (1), no payment received
in foreign exchange by the account holder from any other person resident in
India shall be credited to an EEFC account.
Explanation-
For the purpose of the sub-paragraph (1), payment received through an
international credit for which reimbursement will be provided in foreign
exchange may be regarded as a remittance through normal banking channels.
Following
credits may be made to an EEFC account, namely �
(I)
A portion of 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;
(iii)
Recredit of unutilised foreign currency earlier withdrawn from the
account;
(iv)
Amount representing repayment by the account holder�s importer
customer, of loan/ advances granted in terms of clause (iv) of Paragraph 3.
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
toward 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 purchased from a 100
percent Export Oriented Unit or a unit in (a) Export Processing Zone or (b)
Software Technology Park or (c) Electronic Hardware Technology Park.
(iii)
Payment of customs duty in accordance with the provisions of Export
Import Policy of Central Government for the time being in force.
(iv)
Trade related loan /advances,
not exceeding US$ 3 million, by an exporter holding such account to his importer
customer outside India, subject to compliance with the Foreign Exchange
Management (Borrowing and lending in Foreign Exchange) Regulations, 2000.
(v)
Payment in foreign
exchange to a person resident in India for supply of goods/ services including
payments for airfare and hotel expenditure.
(I)
There is no restriction on withdrawal in rupees of funds held in an EEFC
account. However, the amount withdrawn in rupees shall not be eligible for
conversion into foreign currency and for re-credit to the account.
(ii)
Authorised dealer may issue chequebooks of separate series with the
superscription �EEFC Account� to the account holders maintaining such
accounts, and also satisfy himself while honouring the cheques that the payment
made by the account holder by issue of a cheque is permissible under these
Regulations.
(1)
Save as otherwise provided in this paragraph, nothing contained in
paragraphs 1 to 4 of this Schedule, shall apply to a unit in a Special Economic
Zone.
(2)
A unit in a Spe
|