Who Can Open Resident Foreign Currency Account?

Ever wondered how you can manage your foreign currency once you intend on shifting back to India? 

In this article lets understand what is RFC account and who can open one. 

What is an RFC- Resident Foreign Currency Account?

Those individuals who have lived overseas and returned to India or intend to return to India. They have earned foreign currency and are invested through a bank account in their country of residence.  On returning to India, these individuals have the option to set up a Resident Foreign Currency Account.

Eligibility criteria to hold RFC account is as follows:

  • NRI who has returned to India on or after 18th April, 1992.
  • Resident outside India for a continuous period of not less than 1 year prior to his return.
  • Permanently settled in India


There is no issue of foreign exchange risk. You can now transfer balance to NRI Accounts on regaining NRI status.

Transfer balance to NRI Accounts on regaining NRI status.

The RFC Account meaning is simplified to the fact that a returning NRI can maintain foreign currency through this account. 

There are certain permissible debits and credits into RFC account which are mentioned as follows:


Credits permitted in RFC Account

  • Income / Sale proceeds of assets acquired out of foreign exchange earned abroad.
  • Proceeds of NRE / FCNR accounts or funds remitted from abroad.
  • Funds received as pension or any other superannuation or other monetary benefits from his employer outside India.
  • Received or acquired as gift or inheritance from a close relative.
  • Proceeds of life insurance policy claims/maturity/ surrender values settled in foreign currency from an insurance company in India permitted to undertake life insurance business by the Insurance Regulatory and Development Authority.


Debits permitted from RFC account

  • Funds in RFC Savings Account can be remitted abroad for any bonafide purpose of the account holder without any limit.
  • Facility to withdraw funds in rupees by transferring foreign currency held in RFC account to Resident CASA account. You will have to open a resident INR CASA account to avail this facility..


Features of an RFC Account

  • Maintenance of an RFC Account  is done only in 3 currencies, mainly USD, GBP and EURO, with RFC Deposits done in 4 permitted currencies, which is USD, GBP and EURO
  • If you ever anticipate moving back overseas. The funds in the RFC Account are transferrable to your NRE or FCNR account. 
  • Individual banks offer you the option of setting up your account with joint holding. However, the joint holder should be an eligible individual, eg, returning NRI or even resident relatives as a joint holder on ‘former or survivor’ basis.
  • Minimum tenure for RFC Fixed deposit is 7 days and maximum tenure is 3 years
  • As per bank policy, cheque book is not issued for RFC  SB account.
  • Premature liquidation of RFC deposit will attract 1 % penalty.

Since we have established what is RFC account, we can further find out about the eligibility of the account. 

Who can open RFC Account? 

If you are categorized under any of the three eligibility criteria below, then you can set up an RFC Account. 

  • You classify as an NRI who has returned to India.
  • You were a resident outside India for a period of 1 year or more continuously.
  • You are permanently settled in India since you have returned from overseas.


Documentation required to open RFC account.

  • For RFC Savings Account - RFC Savings Account opening form Click Here and RFC Savings Account undertaking. Click Here
  • For RFC Fixed Deposit Account - RFC fixed deposit account opening form Click Here and RFC fixed deposit account - undertaking. Click Here
  • Photocopy of the pages containing passport details and personal details of all applicants.
  • Copy of Permanent Account Number (PAN) / Form 60 (in absence of PAN).
  • Copy of expired visa and immigration stamps showing evidence of foreign stay for at least 1 year (last departure and arrival page).
  • Passport size photograph of all applicants.
  • Indian Address proof which is deemed OVD.
  • RFC Savings Account can be opened on NIL IP basis.
  • Customer will have to open resident CASA account while opening RFC account.

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Important tips for NRIs coming back home for good, that is a must read.

* The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. You are recommended to obtain specific professional advice from before you take any/refrain from any action. Investments are subject to changes in tax laws. Please contact a professional consultant for an exact calculation of your liabilities.