Q.1. Are Returning Indian permitted to retain their assets abroad even after return to India ?
Ans. Effective 17th July 1992, the Central Government has granted exemption from the surrender requirement to persons who return to India after a continuous stay abroad of one year and above in respect of funds / assets acquired by them abroad otherwise than in contravention of FERA 1973 or out of foreign exchange earned through employment, business or vocation outside India taken up or commenced while they were resident outside India. Persons satisfying the conditions of general exemption can retain their foreign currency accounts with banks abroad and / or hold transfer or dispose of their other foreign currency assets such as shares securities or investments in business, etc. and immovable properties.
Q.2. Are they required to obtain any permission from Reserve Bank for holding these assets after their return to India?
Q.3. Do they enjoy any freedom in regard to utilisation of these overseas assets?
Ans. Yes. They would enjoy complete freedom for utilisation of these assets as well as income earned or sale proceeds received subsequently.
Q.4. Can they bring back the overseas assets to India and hold them in foreign exchange with separate identity?
Ans. Yes. They can repatriate these assets to India and hold them separately in India with authorised dealers under the Resident Foreign Currency (RFC) Accounts Scheme. This will help the account holder to identify the source of credit on a later day.
Q.5. What is the Resident Foreign Currency (RFC) Account Scheme?
Ans. This is a Scheme approved by Reserve Bank permitting persons of India 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 without the permission of Reserve Bank of India.
Q.6 Can a person who has returned to India before 18th April 1992 open a RFC ?
Ans. Persons who have returned to India before 18th April 1992 after having been resident outside India for a continuous period of not less than one year are also eligible to open RFC account if : (a) They hold valid specific permissions / licence from the Reserve Bank of India as on 17th July 1992 to maintain foreign accounts or to hold other foreign currency assets abroad or, (b) They are in receipt of pension or other monetary benefits from their erstwhile overseas employers subsequent to their return to India even if they did not maintain foreign currency account or hold other foreign currency assets abroad.
Q.7 In which currencies can RFC accounts be maintained?
Ans. RFC accounts can be maintained in any convertible currency.
Q.8 What funds can be credited to RFC of returning Indians accounts?
Ans.Undernoted credit transactions may be allowed in RFC accounts:
- Remittance in convertible foreign currency from outside India through normal banking channels representing :
- Funds in bank accounts outside India forming part of eligible assets held by the eligible person.
- Income such as dividend, interest, profit, rent etc. earned on eligible assets held by the eligible person.
- Sale proceeds of eligible assets.
- Pension or other monetary benefits received from outside India in convertible foreign currency, through normal banking channels, arising out of employment taken up outside India by an eligible person prior to his returning to India.
- Interest earned on RFC account.
- Foreign currency notes and travellers cheques brought into India by the eligible person, provided that where the amount tendered exceeds USD 10000 or its equivalent or where the value of foreign currency /bank notes exceeds USD 5000 or its equivalent they have been declared on the Currency Declaration Form (CDF).
- Transfer from other RFC accounts of the account holder.
- Balances in any NRE / FCNR account in the name of the eligible person standing to his credit at the time of his arrival India. No penalty would be payable for premature withdrawals of NRE / FCNR deposits in such cases.
- Unspent foreign exchange surrendered by the RFC account holders subject to the satisfaction of the authorised dealers that the concerned foreign exchange / currency had in fact been released for travel etc. abroad by debit to the same RFC accounts within the stipulated period as required under the Exchange Control regulations.
Q.9 Can a Returning Indian desiring to go abroad again for employment, business or vacation, transfer his funds in RFC account to a NRE / FCNR account?
Q.10 Can persons who have returned to India after a short assignment of less than one year open a RFC account?
Ans. Persons who return to India after a short assignment of less than one year abroad now looking for a RFC account should apply through authorised dealers to Reserve Bank in the form - RFC. RFC accounts opened with the specific approval of Reserve Bank will be governed by the conditions stipulated by Reserve Bank while granting such approval. For arriving at the period of continuous stay abroad of not less than one year short visits to India on personal grounds like meeting family members / relatives or on health grounds which do not indicate the person's intention to stay in India for an indefinite period may be ignored.