Resident Foreign Currency (RFC) accounts in India
If you are a non-resident Indian planning to return back to India for good, you need not worry about the fate of foreign currency (FCNR) deposits held by you under your present status as an NRI. Non-resident Indians may continue to maintain their bank accounts in RFC- Resident foreign currency account after returning to India for permanent settlement. These accounts are known as Resident Foreign Currency accounts (RFC).
Benefits of RFC Accounts:
When an NRI returns to India for good, he can open Resident Foreign Currency (RFC) accounts in India. The RFC term deposit accounts can be opened in following currencies: USD, GBP, EUR, AUD, CAD and JPY. Balance in RFC account can be freely utilized for Investments and expenses in India and also for overseas expenses or investments. RFC accounts can be opened by transfer of balances in FCNR deposits with banks in India. This also includes the maturity proceeds of the Resurgent India Bonds (RIBs).The account cannot be opened with funds from an NRE account. However, once the RFC account is opened with eligible funds as above, the balances in the NRE account of the depositor can be transferred into the RFC account.
If a returning NRI once again decides to settle abroad, the balance in RFC account can be converted / transferred to FCNR account, NRE account and can also be repatriated abroad. RFC Account can be jointly held with another person resident in India who is also eligible to open an RFC account. The main advantage of the RFC account is that it is maintained in foreign currency and the deposit is protected against any fluctuations in the exchange rates.