Restrictions on deposits to foreign currency accounts
Are there any restrictions on deposits to foreign currency accounts?
Restrictions on deposits between a person resident in India and a person resident outside India :
Save as otherwise provided in the Act or Regulations or in rules, directions and orders made or issued under the Act, no person resident in India shall accept any deposit from, or make any deposit with, a person resident outside India.
Provided that the Reserve Bank may, on an application made to it and on being satisfied that it is necessary so to do, allow a person resident in India to accept or make deposit from or with a person resident outside India.
Exemptions
Nothing contained in these Regulations shall apply to the following:
(1) Deposits held in rupee accounts maintained by foreign diplomatic missions and diplomatic personnel and their family members in India with an Authorised dealer.
(2) Deposits held by diplomatic missions and diplomatic personnel in special rupee accounts namely Diplomatic Bond Stores Account to facilitate purchases of bonded stocks from firms and companies who have been granted special facilities by customs authorities for import of stores into bond subject to following conditions:
(a) Credits to the account shall be only by way of proceeds of inward remittances received from outside India through banking channels or by a transfer from a foreign currency account in India of the account holder maintained with an Authorised dealer in accordance with clause 3 of this Regulation;
(b) All cheque leaves issued to the account holder shall be super scribed as “Diplomatic Bond Stores Account No.”;
(c) Debits to the accounts shall be for local disbursements, or for payments for purchases of bonded stocks to firms and companies who have been granted special facilities by customs authorities for import of stores into bond;
(d) The funds in the account may be repatriated outside India without the approval of Reserve Bank.
(3) Deposits held in accounts maintained in foreign currency by diplomatic missions, diplomatic personnel and non-diplomatic staff, who are the nationals of the concerned foreign countries and hold official passport of foreign embassies in India subject to the following conditions :
(a) Credits to the account shall be only by way of:
- proceeds of inward remittances received from outside India through banking channels; and
- transfer of funds, from the rupee account of the diplomatic mission in India, which are collected in India as visa fees and credited to such account;
(b) Funds held in such account if converted in rupees shall not be converted back into foreign currency,
(c) The account may be held in the form of current or term deposit account, and in the case of diplomatic personnel and non-diplomatic staff, may also be held in the form of savings account;
(d) The rate of interest on savings or term deposits shall be such as may be determined by the Authorised dealer maintaining the account;
(e) The funds in the account may be repatriated outside India without the approval of Reserve Bank.
(4) Deposits held in accounts maintained in rupees with an Authorised dealer by persons resident in Nepal and Bhutan.
(5) Deposits held in accounts maintained with an authorised dealer by any multilateral organization and its subsidiary/affiliate bodies and officials in India of such multilateral organisations, of which India is a member nation.
Disclaimer
