What is RFC bank account for NRI?

July 14, 2011

Non Resident Indian(NRI)

In my previous articles I have explained about the different types of NRI bank accounts. These accounts are opened while you are in abroad and maintaining the NRI status. These accounts has to be converted into resident account (normal savings account) when you are returning to India. Sometimes, when you are returning to settle permanently in India, still you may want to keep your earnings on the foreign currency because you have to pay some bills on abroad or to wait for the better conversion rates. In this case, you can open Resident Foreign Currency (RFC) to keep your earnings till the time specified in the regulations. This article presents more details on that subject. If you have any doubts, please post it in the comments section. Subscribe to our future articles here.

What is RFC bank account?

RFC stands for Resident Foreign Currency (RFC). This name itself implies that this account is meant for maintaining the foreign currencies while you are resident Indian. This account can be opened by the persons who are returning to India to settle permanently.

After you are coming back to India, you are allowed to open RFC account and transfer all the foreign currencies from other NRI bank accounts like NRE, NRO or FCNR. As per the regulations, the NRI bank accounts NRE or NRO must be converted as the normal resident accounts. You are not allowed to continue using the NRE and NRO accounts. To solve that problem, you can create new RFC account to maintain the foreign currency.

Who are eligible to open RFC account?

If you meet any of the following conditions then you can open RFC account.

  • You are an NRI who has returned to India on or after 18th April, 1992
  • You stayed abroad (maintaining as NRI status) for minimum of one year prior to coming back to India
  • If you are a person returning from abroad less than one year and want to open RFC account, need to apply Reserve Bank of India(RBI) to get the approval.
  • You have been permanently settled in India since your return
  • To open RFC account, you must submit the following documents:
    • Passport details
    • Copy of valid visa and immigration stamps showing evidence of foreign stay for at least 1 year
    • RFC declaration form

What are the receivables on RFC account?

If the applicant for the RFC account is resident of India, money credit to the account must be any of the following:

  • received as pension or any other superannuation or other monetary benefits from his employer outside India; or
  • realized on conversion of the assets referred to in sub-section (4) of section 6 of the Act, and repatriated to India; or
  • received or acquired as gift or inheritance from a person referred to in sub-section (4) of section 6 of the Act; or
  • referred to in clause (c) of section 9 of the Act, or acquired as a gift or inheritance therefrom.
  • received as the 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

Remember These Points while Opening RFC Account

Apart from the above explanations, the following are the important points related to the RFC account.

  • RFC accounts may be maintained in the form of current, savings (without cheque facility) or term deposit accounts and held singly or jointly only in the names of eligible persons.
  • No interest shall be payable on balances held in the form of current accounts.
  • No loan/overdraft shall be granted by authorized dealers against balances in RFC account.
  • Funds held in RFC account may be freely remitted abroad or credited to fresh NRE/FCNR accounts in the event of the account holder becoming non-resident by virtue of his going abroad for employment, etc.
  • Eligibility to open RFC account is no way related to the RNOR status on the applicant.


I hope this article would be much useful for the NRIs who are planning to come back India and need a foreign currency account. If you are an NRI and have any doubts on the NRI status or bank accounts, please post it in the comments section. I will try to answer all your questions. If you like this article, please subscribe to our future articles here.


One Response to “What is RFC bank account for NRI?”

  1. eaadhar Says:

    Such an awesome article. Thanks for helping NRI’s with this kind of piece of information. Thanks for the awesome share!


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