🌍 Foreign Currency Accounts for Indian Residents: 2025 FEMA FAQ Guide

🧾 Introduction: Why Foreign Currency Accounts Matter for Indian Residents

Resident Indians increasingly earn or receive funds in foreign currency — from exports, overseas jobs, foreign investments, or gifts. Under FEMA (Foreign Exchange Management Act), 1999, the RBI allows certain foreign currency accounts to be held in or outside India, under regulated conditions.

This blog answers key FAQs (as of January 2025) based on FEMA 10(R)/2015-RB and the Master Direction on Deposits, tailored for residents, bankers, and wealth managers.

An Indian resident explores foreign currency accounts, surrounded by stacks of US dollars and coins, highlighting financial opportunities.

Q1. Who is a “Person Resident in India” under FEMA?

As per Section 2(v) of FEMA:

✅ Considered a resident if:

• They have stayed in India ≥182 days during the last financial year
  

❌ But not considered a resident if:

• They have left India for:

  • Employment

  • Business/profession

  • An uncertain or indefinite stay abroad
    

✅ Also included:

• Companies/branches registered in India

• Indian offices of foreign companies

• Foreign offices of Indian entities
  

Q2. What is a Foreign Currency Account?

It’s a bank account held in any currency other than INR, Nepalese Rupee, or Bhutanese Ngultrum — either in India or abroad.

Q3. What types of foreign currency accounts can residents open in India?

Account Type	EEFC (Exchange Earners')	RFC(D) (Domestic)	RFC (General)
Who can open?	Exporters, foreign earners	Any resident	Any resident
Joint Account?	Yes (close relatives)	Yes	Yes
Account Type	Current only	Current only	Current, Savings, FD
Interest?	❌ No	❌ No	✅ Possible
Credits include:	Export income, fees abroad, interest	Gifts, leftover foreign cash, sale of shares	Salary, pension, gifts/inheritance abroad, sale of foreign assets
Debits used for:	Indian or foreign transactions	Legal usage	No restrictions

Q4. What types of accounts are allowed in India?

Account Holder	Allowed Types
Individuals	Savings, Current, Term Deposit
Companies	Current, Term Deposit only

📌 Joint accounts are allowed with eligible persons only

Q5. When can a resident open a foreign currency account outside India?

Situation	Eligibility
Student abroad	Allowed for study period; reclassified under LRS upon return
Tourist	Can open for duration of travel; funds must be repatriated after return
Trade fair/exporter	Allowed to collect proceeds abroad; bring funds back within 1 month
Exporter	Can open to receive advance/export payments
Employee (working for foreign company in India)	Can receive full salary abroad
Resident under Liberalised Remittance Scheme (LRS)	Can open account freely as per LRS rules

Q6. Can a resident keep an overseas account opened when they were a non-resident?

✅ Yes, if:

• The account was opened when the person was a non-resident, or

• The account was inherited from a non-resident
  

No need to close it, subject to compliance.

Q7. What happens to an offshore account when the holder dies?

The resident nominee must:

• Close the account, and

• Repatriate the funds to India through proper banking channels
  

⚖️ FEMA Notifications Referenced:

• FEMA 10(R)/2015-RB (Jan 21, 2016)

• FEMA 10(R)(3)/2024-RB (Apr 19, 2024)

• FEMA 10(R)(5)/2025-RB (Jan 15, 2025)

• GSR No.570(E), No.160(E), and others listed
  

📌 Conclusion: Use Foreign Currency Accounts Strategically, Not Casually

Whether you’re a resident earning from exports, a returning NRI, or an Indian student abroad, FEMA offers clear permissions to hold foreign currency accounts, both in India and overseas. But compliance is critical — from account type and tenure to source of funds and repatriation.

📩 Need assistance with account classification, LRS compliance, or FEMA disclosures? Reach out to GIFT CFO — your reliable FEMA and RBI advisory partner.