What changed
RBI reviewed its earlier circular (A.P. DIR Series Circular No. 124 dated May 10, 2012) regarding EEFC accounts. It now explicitly states that the provisions of that circular will not apply to Resident Foreign Currency (RFC) accounts.
What it means for you
Banks and their customers holding RFC accounts are not affected by the EEFC-related changes from the May 2012 circular. This provides clarity and avoids confusion between the two account types. AD Category-I banks must update their internal guidelines and communicate this to relevant constituents.
What you must do
- Inform all constituents and customers about the non-applicability of the May 10, 2012 circular to RFC accounts.
- Update internal compliance manuals and training materials to reflect this distinction.
- Ensure that RFC account operations continue under existing rules without applying EEFC provisions.
Who it affects
AD Category-I banks, Customers holding Resident Foreign Currency (RFC) accounts, Bank compliance and operations teams
Does this circular change any rules for RFC accounts?
No. It only clarifies that the earlier EEFC circular does not apply to RFC accounts, so no new rules are introduced for RFC accounts.
What should banks do with this circular?
Banks must bring the contents to the notice of their constituents and customers, especially those with RFC accounts, to ensure correct application of regulations.