NRIs returning to India for permanent settlement can open RFC accounts.

Permissible Credits

Facility for returning Indians.

v      Balance in NRE/FCNR accounts on arrival in India.(Fixed deposits can be closed prematurely without penalty or held till maturity and then credited to RFC a/c)

v      To maintain outside earnings in convertible foreign exchange.  

v      All NRIs who had been resident outside India for a continuous period for 1 year eligible

v      Remittances from abroad being sales proceeds of assets held abroad or income earned abroad. 

v      Proceeds of foreign currency notes/Travellers cheques brought into India.

v      RFC accounts are at present being opened in US$ only. Can be opened by PIOs/NRIs returning to India after staying abroad. 

v     Maintained in US$ in Savings Bank / Current account or Term Deposit of 6/36 months duration.

v     No cheque book issued for RFC(SB) account/Current Account.

v      Interest payable in US$ - can be drawn in India rupees on conversion

v      Joint holding with another person eligible to open RFC account is permitted. 

v      Funds can be used to make bonafide payments abroad. 

v      Withdrawals can be made for making payments in India and  are permitted in Rupees only.

The accounts can be converted to FCNR/NRE accounts in case the person becomes an NRI again.