Resident Foreign Currency (RFC) Accounts
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What is the primary purpose of a Resident Foreign Currency (RFC) account?
RFC accounts allow eligible persons, mainly returning residents, to hold lawfully received or acquired foreign exchange in foreign currency form within India.
What is the defining characteristic of the source funds eligible for credit to an RFC account?
Must be foreign exchange received or acquired lawfully, not rupees.
Who is the primary target beneficiary of the RFC account facility?
The RFC facility is designed mainly for returning residents and other eligible persons who lawfully hold or receive foreign exchange and wish to keep it in India in foreign currency form.
Can RFC account balances be used for capital account transactions under FEMA?
Yes, permissible capital account transactions are allowed under FEMA.
In what forms can an RFC account be maintained?
An RFC account can be maintained as a current account, savings account, or term deposit.
What use of RFC balances is strictly prohibited even though utilisation is broadly free?
Any use that is contrary to FEMA provisions is not allowed.
How is the interest rate on RFC accounts determined?
The interest rate on RFC accounts is deregulated and is decided by the Authorised Dealer (AD) bank, not fixed by RBI.
Is overseas pension received from a foreign employer an eligible credit source for an RFC account?
Yes, pension and superannuation benefits from overseas employer are eligible.
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