Foreign Currency Accounts Outside India
Residents can hold accounts abroad only under named permissions, each with its own repatriation rule.
A person resident in India cannot simply open a bank account abroad. FEMA section 9 and the Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2015 say who may, for what purpose, and what must come back to India. A case that does not fit one of those permissions is not covered by them.
For a branch banker the question usually arrives as a customer request: a student leaving for a master's, an exporter wanting a dollar account in Singapore, a family remitting under LRS. Each has its own permission with its own conditions.
You save ₹200 today
- 5 full-length mocks
- 553 questions, chapter by chapter
- Rate & risk calculations
One payment, no subscription · Valid for 2 months
Who May Hold a Foreign Currency Account Outside India
Resident individual under LRS
Purpose
Sending remittances permitted under the Liberalised Remittance Scheme
Key condition
Within the LRS limit and purposes
Student gone abroad for studies
Purpose
Expenses during the stay abroad
Key condition
Credits from India must follow FEMA; on return, the account is deemed opened under LRS
Resident on a visit abroad
Purpose
Expenses during the visit
Key condition
Balance repatriated to India on return
Participant in an overseas exhibition or trade fair
Purpose
Crediting sale proceeds of goods
Key condition
Balance repatriated within one month of the fair closing
Exporter
Purpose
Realisation of full export value and advance remittances
Key condition
Used for imports or repatriated by the end of the next month (three months for banks in an IFSC), after forward commitments
Indian startup with an overseas subsidiary
Purpose
Export or sales earnings of the startup or its subsidiary
Key condition
Export-related balances repatriated within the export realisation period
Foreign citizen in India, or Indian deputed by a foreign company
Purpose
Receiving or remitting entire salary payable in India
Key condition
Applies to specified deputation and employment cases
Indian Party making ODI
Purpose
Overseas direct investment
Key condition
Only where the overseas regulator mandates such an account
ECB, ADR or GDR raiser
Purpose
Parking funds pending use or repatriation
Key condition
Subject to the ECB or ADR/GDR conditions
AD banks, Indian banks' overseas branches, shipping and airline companies, IRDAI-registered insurers, Indian firms for their foreign offices
Purpose
Normal business and incidental transactions
Key condition
Business use
| Holder | Purpose | Key condition |
|---|---|---|
| Resident individual under LRS | Sending remittances permitted under the Liberalised Remittance Scheme | Within the LRS limit and purposes |
| Student gone abroad for studies | Expenses during the stay abroad | Credits from India must follow FEMA; on return, the account is deemed opened under LRS |
| Resident on a visit abroad | Expenses during the visit | Balance repatriated to India on return |
| Participant in an overseas exhibition or trade fair | Crediting sale proceeds of goods | Balance repatriated within one month of the fair closing |
| Exporter | Realisation of full export value and advance remittances | Used for imports or repatriated by the end of the next month (three months for banks in an IFSC), after forward commitments |
| Indian startup with an overseas subsidiary | Export or sales earnings of the startup or its subsidiary | Export-related balances repatriated within the export realisation period |
| Foreign citizen in India, or Indian deputed by a foreign company | Receiving or remitting entire salary payable in India | Applies to specified deputation and employment cases |
| Indian Party making ODI | Overseas direct investment | Only where the overseas regulator mandates such an account |
| ECB, ADR or GDR raiser | Parking funds pending use or repatriation | Subject to the ECB or ADR/GDR conditions |
| AD banks, Indian banks' overseas branches, shipping and airline companies, IRDAI-registered insurers, Indian firms for their foreign offices | Normal business and incidental transactions | Business use |
Accounts Kept From Non-Resident Days
A resident may continue to maintain a foreign currency account outside India if it was opened while he was resident outside India, or if he inherited it from a person resident outside India. This is the provision a returning NRI relies on to keep a salary account in London or Dubai open after moving back.
On the death of a resident who held such an account, a resident nominee has to close it and bring the proceeds back to India through banking channels.
Permission and repatriation MCQs. No signup.
The October 2025 Change for Exporters
Exporters were already allowed an overseas foreign currency account to receive export proceeds, but balances had to be used for imports or repatriated by the end of the next month. RBI's October 2025 amendment kept that for most jurisdictions and gave accounts with banks in an International Financial Services Centre up to three months. Older courseware shows only the one-month rule.
How CCFE Tests This
Expect 'which of the following residents may open an account abroad?' questions, and repatriation-period questions with close distractors. Two traps recur: the student account (it is not closed on return; it is deemed to be an LRS account) and the visitor account (its balance must come back on return). Candidates who apply one rule to both lose the mark.
FAQs
Can a resident Indian open a bank account abroad?expand_more
Yes, within the permissions in RBI's foreign currency account regulations. The most common route is a resident individual opening a foreign currency account abroad for remittances under the Liberalised Remittance Scheme.
What happens to a student's foreign bank account after returning to India?expand_more
It does not have to be closed. On the student's return after completing studies, the account is deemed to have been opened under the Liberalised Remittance Scheme.
Can an Indian exporter keep export proceeds in a foreign bank account?expand_more
Yes. An exporter may hold a foreign currency account abroad for export proceeds and advances, using them for imports or repatriating them by the end of the next month, or within three months for an account with a bank in an IFSC.
Can a returning NRI keep his overseas bank account?expand_more
Yes. A resident may continue a foreign currency account abroad that he opened while he was resident outside India.
Next steps
Take a full CCFE mock test100 questions across all six modules, timed and scored.