How To Open A Resident Foreign Currency (RFC) Account?

Those who have lived abroad and returned to India or are planning to move back will have earned income in a currency other than the rupee during their stay there. The funds may have been placed in foreign bank accounts and invested in assets abroad.

These individuals have the choice of opening a Resident Foreign Currency (RFC) account here in India on their return. Even if you plan on moving back to another country in the future, you can transfer it to an NRE (Non-Resident External Rupee) account or FCNR (Foreign Currency Non-Resident) account as the funds will be held in a foreign denomination of your choice.

The account is ideal for those who choose to spend their retirement in India and are to receive continuous income like pension from their place of employment abroad or earnings like dividend from their investments.

Eligibility to open a RFC account

The RFC account can be opened by a person who is a "resident" of India as per the Income Tax Rules with the foreign exchange proceeds that the person may have earned or received from a resident outside India. Be it retirement corpus, funds from the sale of foreign assets, proceeds from a scheme or gifts from a resident outside India.

How to open a RFC account in India?

You can open the account at any mainstream commercial bank that provides this facility. Almost all banks allow the maintenance of this account in US dollars or GBP (Great Britain Pound). If you want to maintain in the RFC account in other currencies like Japanese yen, you can pick a bank that allows it.

To open the account

If you are an NRI (non-resident Indian):

• Submit a duly filled RFC account opening form available at the bank's nearest branch. You can also download this form online from the bank's official website before you approach the branch.
• Self-attested copies of passport, expired work permit/employment visa and the current Indian residence address proof are also required.

Person of Indian Origin (PIO) will have to submit their PIO/OCI card, past Indian passport of themselves/spouse/parent/grandparent along with self declaration of Indian origin or the self declaration for PIO as given on relationship form and Indian work or resident visa in addition to the requirements mentioned for an NRI.

Things to note:

• An RFC account can be maintained in a limited number of currencies. Choose your bank accordingly. For example, while ICICI Bank allows maintaining a RFC account in USD or GBP only, Axis Bank has the option of 5 currencies (USD, GBP, EURO, AUD, and CAD).
• If you move back abroad, you can transfer the funds to an NRE/FCNR account.
• It can be opened as a joint account if the joint holder a resident returning back to India as well. Some banks also allow joint holding with a resident Indian on a 'former or survivor' basis.
• The RFC account allows receiving income earned abroad like dividend, rent, sale proceeds of an asset, etc along with pension or other benefits arising from employment outside India.
• Interest will be earned on these deposits.
• A nominee can be added to the account.
• Cash withdrawals from this account will be in Indian rupee.