**Policy Summary: Amendment to Foreign Exchange Management Regulations Regarding Foreign Currency Accounts**
On April 23, 2024, the Reserve Bank of India (RBI) issued Notification No. FEMA. 10R/32024/RB, amending the Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2015. This amendment, titled the "Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Amendment Regulations, 2024," comes into effect on the date of its publication in the Official Gazette.
The key change pertains to sub-regulation F1 of Regulation 5 of the Principal Regulations. The amendment stipulates that funds raised through External Commercial Borrowings (ECB), American Depository Receipts (ADRs), Global Depository Receipts (GDRs), or direct listing of equity shares of Indian companies on International Exchanges may be held in foreign currency accounts with banks outside India, pending their utilization or repatriation to India. This is subject to compliance with the relevant conditions governing the raising of ECBs, ADRs, GDRs, and direct listings.
The amendment is issued by the Reserve Bank of India, Foreign Exchange Department, Central Office, Mumbai, under the authority granted by Section 9 and clause (e) of subsection 2 of section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999). Latha Radhakrishnan, General Manager-in-Charge, is the contact person. The Principal Regulations were initially published in the Official Gazette of Government of India [G.S.R.No.96(E) dated 21.01.2016] and subsequently amended [G.S.R. No.570(E) dated 01.06.2016, G.S.R. No.160(E) dated 27.02.2019].
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the country's monetary policy and financial system.
Foreign Exchange Management Act, 1999: An Act of the Parliament of India to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India.
Foreign Exchange Management Foreign Currency Accounts by a person resident in India Regulations, 2015: Regulations issued by the Reserve Bank of India pertaining to foreign currency accounts held by Indian residents.
Foreign Exchange Management Foreign Currency Accounts by a person resident in India Amendment Regulations, 2024: Amendment to the 2015 regulations concerning foreign currency accounts held by Indian residents.
Section 9 of the Foreign Exchange Management Act, 1999: Section of the Foreign Exchange Management Act, 1999 that confers powers to Reserve Bank of India.
Section 47 of the Foreign Exchange Management Act, 1999: Section of the Foreign Exchange Management Act, 1999 that deals with power to make regulations.
External Commercial Borrowings: Commercial loans raised by eligible resident entities from recognized non-resident entities.
American Depository Receipts: A certificate representing ownership of shares in a foreign company that are traded on U.S. stock exchanges.
RESERVE BANK OF INDIA
(FOREIGN EXCHANGE DEPARTMENT)
CENTRAL OFFICE
MUMBAI 400 001
No. FEMA. 10(R)(3)/2024-RB April 23, 2024
Foreign Exchange Management (Foreign Currency Accounts by a person resident in India)
(Amendment) Regulations, 2024
In exercise of the powers conferred by Section 9 and clause (e) of sub-section (2) of section 47 of the
Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank of India makes the following
amendment in the Foreign Exchange Management (Foreign Currency Accounts by a person resident in
India) Regulations, 2015 (Notification No. FEMA10(R)/2015-RB dated January 21, 2016) (hereinafter
referred to as 'the Principal Regulations'), namely:-
1. Short Title & Commencement
(i) These Regulations may be called the Foreign Exchange Management (Foreign Currency Accounts by a
person resident in India) (Amendment) Regulations, 2024.
(ii) They shall come into force from the date of their publication in the Official Gazette.
2. Amendment to Regulation 5 of the Principal Regulations
In sub-regulation (F)(1) of Regulation 5 of the Principal Regulations, the existing provision shall be
substituted by the following, namely:
“Subject to compliance with the conditions in regard to raising of External Commercial Borrowings (ECB)
or raising of resources through American Depository Receipts (ADRs) or Global Depository Receipts
(GDRs) or through direct listing of equity shares of companies incorporated in India on International
Exchanges, the funds so raised may, pending their utilisation or repatriation to India, be held in foreign
currency accounts with a bank outside India.”
(Latha Radhakrishnan)
General Manager-in-Charge
Foot Note:
The Principal Regulations were published in the Official Gazette of Government of India - Extraordinary -
Part-II, Section 3, Sub-Section (i) dated 21.01.2016 - G.S.R.No.96(E) and subsequently amended as under
G.S.R. No.570(E) dated 01.06.2016
G.S.R. No.160(E) dated 27.02.2019