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TMI BlogForeign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2015 ((Amended upto June 01, 2016)X X X X Extracts X X X X X X X X Extracts X X X X ..... ions, 2015. ii) They shall come into 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) 'Schedule' means schedule to these Regulations; v) the words and expressions used but not defined in these Regulations shall have the same meanings respectively assigned to them in the Act. 3. Restriction on holding foreign currency account by a person resident in India:- Save as otherwise provided in the Act or rules or regulations made there under, 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 dee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same meaning as assigned to it under section 2(77) of the Companies Act, 2013. (C) Resident Foreign Currency (Domestic) Account (1) A resident Individual may 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 as under: a. by way of payment for services not arising from 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 the purpose of this sub-regulation, the expression 'relative' shall have the same meaning as assigned to it under section 2(77) of the Companies Act, 2013. f. by way of earning through export of goods/ services, or as royalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Account with a bank in 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. (G) Other cases (1) The Indian agent of a shipping or an airline company incorporated outside India, may open, hold and maintain a Foreign Currency Account with 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, subje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss 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. (B) Account by a company/ firm in the name of its office/ branch/ representative outside India A firm or a company or 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 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. 15 per cent of the average annual sales/ income or turnover of the Indian entity during the last two financial years or up to 25 per cent of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntract/ 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 Foreign Currency Account abroad for the purpose of making overseas direct investments subject to the following terms and conditions: a. The Indian party is eligible for making overseas direct investment in terms of Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations, 2004 as amended from time to time b. The host country regulations stipulate that the investment into the country is required to be routed through a designated account. c. The account shall be opened, held 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to carry out insurance/ reinsurance business may open, hold and maintain a Foreign Currency Account with a bank outside India for the purpose of meeting the expenditure 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 remittances eligible under this Scheme (5) 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. (6) A person resident in India who has gone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prescribed by the Reserve Bank from time to time. b. singly or jointly in the name of person eligible to open, hold and maintain such account. 7. Remittances out of the account after the account holder's death:- On the death of a foreign currency account holder, - a. 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 holder; b. 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; 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 Reserve Bank from time to time; and b. submit periodic return or statement, if any, as may be stipulated by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epartment 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 the provisions of paragraph (1); ii) Interest earned on the funds held in the account; iii) Re-credit 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. v) Representing the disinvestment proceeds received by the resident accountholder on conversion of shares held by him to ADRs/ GDRs under the DR Scheme, 2014 approved by the Government 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 accorda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount shall only be in the form of current account and no interest should be paid on the balance held in the account. d. No intra-account transfer should be allowed between the DDAs maintained by the account holder. e. An exporter firm/ company shall be permitted to open and maintain not more than 5 DDAs. f. The balances held in the accounts shall be subject to Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) requirements. 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:- i. Payment for import/ purchase of rough diamonds from overseas/ local sources. ii. Payment for purchase of cut and polished diamonds, coloured gemstones and plain gold jewellery from local sources. iii. Payment for import/ purchase of gold from ove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom time to time and the terms and conditions stipulated for opening and maintenance of the DDA with your bank and any other foreign exchange / foreign trade regulation of Reserve Bank of India / Government of India. We request you to open a Diamond Dollar Account/s in the name of the firm/company. (Signature of the Authorized Official of the firm / company) Name : Designation : Seal of firm / company : Date : Place: Published in the Official Gazette of Government of India - Extraordinary - Part-II, Section 3, Sub-Section (i) dated 21.01.2016- G.S.R.No.96(E) and subsequently amended as under:- G.S.R.No. 570(E) dated 01.06.2016 --------- 1 Inserted with effect from June 1, 2016 vide GSR 570(E) dated June 1, 2016. 2 Renumbered as "F" with effect from June 1, 2016 vide GSR 570(E) dated June 1, 2016. Prior to renumbering, it read as "E". 3 Inserted with effect from June 1, 2016 vide GSR 570(E) dated June 1, 2016. Prior to insertion, it read as, "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 inciden ..... X X X X Extracts X X X X X X X X Extracts X X X X
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