FOREIGN CURRENCY ACCOUNTS FOR RESIDENTS AND OTHER ASPECTS
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Principles and Practices of Banking — JAIIB.
One-liners from this chapter
Free sample — 8 of 65 rapid-fire Q&A cards.
What is an RFC (Resident Foreign Currency) account and who can open it?
An RFC account is a foreign currency account that can be opened by a person resident in India who was previously a Non-Resident Indian (NRI) and has returned to India after being a non-resident for not less than one year.
What is the maximum period for which an RFC account can remain dormant before banks impose restrictions?
Banks apply dormancy rules typically after 2 years of inactivity.
In which currencies can RFC accounts be maintained?
RFC accounts can be maintained in any permitted currency, i.e., a foreign currency which is freely convertible, such as USD, GBP, EUR, JPY, and other major currencies.
Can the proceeds of life insurance policies received in foreign currency be credited to an RFC account?
Yes, foreign currency insurance proceeds can be credited to RFC accounts.
What types of accounts are permissible under the RFC scheme for returning residents?
RFC accounts can be opened and maintained in the form of savings, current, recurring, or fixed deposit accounts with authorised dealers in India.
Which RBI department primarily oversees the regulation of RFC accounts?
The Foreign Exchange Department of RBI oversees RFC account regulation.
Can RFC account funds be used to make investments abroad?
Yes, funds in RFC accounts can be used for investments outside India, making payments outside India, and for meeting expenses of close relatives outside India, subject to FEMA provisions.
What is the permitted tenure for fixed deposits under the RFC account scheme?
RFC fixed deposits can be held from 1 month to 3 years tenure.
Video classes for this chapter
More chapters in Module A - General Banking Operations
Master the full PPB syllabus
Every chapter of Principles and Practices of Banking — videos, tests, notes and one-liner decks in one place.