The Reserve Bank of India (RBI) has amended regulation 5 of the Foreign Exchange Management (Foreign currency accounts by a person resident in India) Regulations, 2015 (Foreign Currency Account Regulations), to allow an Indian startup/any other entity as may be notified by the RBI, which has an overseas subsidiary, to open a foreign currency account with a bank outside India. The account shall be opened for the purpose of crediting foreign exchange earned out of exports/sales made by the overseas subsidiary. This is subject to the proviso that the balances are repatriated to India within the period specified under Foreign Exchange Management (Export of Goods and Services) Regulations, 2015.
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The Foreign Currency Account Regulations also amend the regulations applicable to insurance/reinsurance companies registered with Insurance Regulatory and Development Authority of India, allowing such companies to open, hold and maintain a foreign currency account with a bank outside India for the purpose of meeting the expenditure incidental to the business carried out by them and for that purpose, credit to such account the insurance/reinsurance premiums received by such companies outside India.
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