Those who have lived in foreign counties and returned to India or are planning to return would have received income in a currency other than in Indian rupee during their stay in India.  The amount may have been placed in foreign bank accounts. These people have the option of opening a Resident Foreign Currency (RFC) account here in India on their return. Even though, in future, if you plan for moving to another country, then you can transfer your account to an NRE (Non-Resident External Rupee) bank account or FCNR (Foreign Currency Non-Resident) bank account as the amount will be held in a foreign denomination of your choice. The RFC accounts are best for those who wish to spend their retirement in India and continue to get continuous income like pension from their place of job in abroad or earnings like a dividend from their investments.

Eligibility to open an RFC account: The RFC account can be opened by those individuals who are residents of India as per the Income Tax Rules, and with the foreign exchange proceeds a person may have earned or received from an NRI.

How to open an RFC account in India: One can open the RFC account at any mainstream commercial bank that renders this facility. Moreover, almost all banks allow the maintenance of this account in GBP (Great Britain Pound) or US dollars. If a person wants to maintain in the RFC account in other currencies like Japanese yen, he/she can pick a bank that allows it.

How to open the RFC account if you are an NRI:

• Submit a duly filled RFC bank account opening form which is available at the bank’s nearest branch. One can also download this form online from the bank’s official website prior to approaching the branch.
• Self-attested photocopies of passport, expired work permit or employment visa and the current Indian residence address proof are also needed.
• Person of Indian Origin (PIO) requires to submit their PIO card, previous Indian passport of themselves/parent/grandparent/spouse along with the self-declaration of Indian origin and the self-declaration for PIO as mention on relationship form and Indian work visa or resident visa in addition to the requirements specified for an NRI.

Points to note: An RFC account can be maintained in a restricted number of currencies. Choose your bank accordingly. For instance, while ICICI Bank allows maintaining an RFC bank account in GBP or USD only, Axis Bank has the option of total five currencies (GBP, EURO, USD, AUD, and CAD). In case of an NRI move back abroad, he/she can transfer the funds to an NRE/FCNR bank account. This account can also be opened as a joint account if the joint holder a resident returning to India as well. Some banks permit to open joint holding account with a resident Indian on a ‘former or survivor’ basis. The RFC bank account allows earning income earned abroad like rent, dividend, sale proceeds of an asset, etc. along with pension or other profits arising from employment outside India.

Interest will also be earned on these deposits. A nominee can be included to the account. Cash withdrawals from this bank account will be in the form of the Indian rupee.