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Foreign Currency Accounts for Ship-Manning Agencies

No longer current — replaced by RBI Circular No. 15 dated 24 September 2015 (Foreign Accounts of Ship/Airline Manning Agencies)

Source: Reserve Bank of India · RBI/2006-2007/369 · issued 30 Apr 2007 · ~2 min read

Quick answerRBI now allows AD Category-I banks to let ship-manning/crew agencies open non-interest bearing foreign currency accounts in India, funded only by inward remittances from overseas principals, for routine business expenses.

What changed

Previously, only shipping or airline companies incorporated outside India (or their agents) could hold foreign currency accounts in India for local expenses. Now, ship-manning and crew-management agencies serving overseas shipping companies can also open such accounts. Credits are restricted to inward remittances from the overseas principal, and debits cover ordinary business expenses like crew management.

What it means for you

Banks can now offer a new product to ship-manning agencies, but must ensure accounts are non-interest bearing and no credit facilities are extended against them. Reserve requirements apply, and no EEFC facility is allowed. This expands the scope of permissible foreign currency accounts under FEMA, potentially increasing fee-based income for banks.

Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.

What banks were required to do at the time

Update internal FEMA compliance checklists to include ship-manning/crew agencies as eligible entities for foreign currency accounts.
Ensure account opening forms and agreements specify that accounts are non-interest bearing and valid only during the agreement period.
Train staff to verify that credits come only via inward remittances from the overseas principal and debits are for ordinary business expenses.
Monitor that no fund-based or non-fund-based credit facilities are granted against these accounts.
Report these accounts in regulatory returns as per existing reserve requirement norms.

Who it affects

AD Category-I banks, Ship-manning and crew-management agencies in India, Overseas shipping companies using these agencies

❓ Common questions

Regulatory timeline

Decoded by BankPulse 2026-06-19 17:04 IST
Superseded by — RBI Circular No. 15 dated 24 September 2015 (Foreign Accounts of Ship/Airline Manning Agencies)
Status change: superseded 10 Jul 2026, 04:06 IST

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

Can these accounts earn interest?

No, the circular explicitly states the accounts must be non-interest bearing.

What happens if the agreement with the overseas principal expires?

The account can only be maintained during the validity period of the agreement. Once it expires, the account must be closed or dealt with as per FEMA guidelines.

Are these accounts subject to reserve requirements?

Yes, banks must meet the prescribed Reserve Requirements (like CRR/SLR) on balances held in these accounts.

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Superseded by RBI Circular No. 15 dated 24 September 2015 (Foreign Accounts of Ship/Airline Ma

📜 Read the original circular — full text as issued by RBI

RBI/2006-2007/369

A. P. (DIR Series) Circular No. 48 
 April 
30, 2007 
 To, 
 All 
Category - I Authorised Dealer Banks 
 Madam 
/ Sir, 
 Opening 
of foreign currency accounts in India by 
ship-manning / crew-management agencies 

 Attention 
of Authorised Dealer Category-I (AD Category - I) banks is invited to Regulation 
6 of Foreign Exchange Management (Foreign Currency Accounts by a person resident 
in India) Regulations, 2000 notified vide Notification No. FEMA 10/2000-RB dated 
May 3, 2000, as amended from time to time, in terms of which general permission 
is available to a shipping or airline company, incorporated outside India or its 
agent in India to open, hold and maintain a foreign currency account with an AD 
Category – I bank in India for meeting the local expenses in India of such shipping 
or airline company. 

 2. 
As announced in the Annual 
Policy Statement for the year 2007-08 (para 146 (i) vi)), it has now been 
decided to allow ship manning / crew managing agencies that are rendering services 
to shipping companies incorporated outside India, to open foreign currency accounts 
in India. Accordingly, AD Category – I banks may allow ship-manning / crew managing 
agencies in India to open and maintain non-interest bearing foreign currency accounts 
in India for the purpose of undertaking transactions in the ordinary course of 
its business, as detailed below : 
 a) 
Credits to such accounts would be only by way of inward remittances through normal 
banking channels from the overseas principal.
 b) 
Debits will be towards various expenses in connection with the management of the 
ships / crew in the ordinary course of its business.
 c) 
No credit facility (fund based or non-fund based) should be granted against security 
of funds held in the account.
 d) 
The bank should meet the prescribed Reserve Requirements in respect of such accounts.
 e) 
No EEFC facility should be allowed in respect of the remittances received in the 
account.
 f) The account will 
be maintained only during the validity period of the agreement. 

 3. 
Necessary amendments to Notification No. FEMA 10/2000-RB dated May 3, 2000 [Foreign 
Exchange Management (Foreign Currency Accounts by a person resident in India) 
Regulations, 2000] are being issued separately. 
 4. 
AD Category - I banks may bring the contents of this circular to the notice of 
their constituents and customers concerned. 
 5. 
The directions contained in this Circular have been issued under Section 10 (4) 
and 11 (1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and is without 
prejudice to permissions / approvals, if any, required under any other law. 

Yours faithfully, 
 (Salim 
Gangadharan)
 Chief General Manager

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2006-2007/369 · issued 30 Apr 2007. The plain-English explanation above is BankPulse’s own independent summary.

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BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=3476&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.