Regulations and Usage

Foreign Currency Accounts (FCY Accounts) are vital enablers of smooth cross-border trade for Indian exporters and businesses. Regulated by the Reserve Bank of India under FEMA, these accounts allow exporters to hold, manage, and utilise their foreign currency earnings effectively. For global investors, corporates, and bankers engaged with India, understanding FCY account types and their rules is key to managing trade transactions, foreign exchange exposures, and compliance. This quiz takes you through the essentials of FCY accounts in India, from basic concepts to specialised structures such as EEFC, RFC, and FCNR

If balances in FCY accounts are not managed as per FEMA regulations, the exporter could be liable under:

Only GST penalties

Companies Act offences

No liability since FCY accounts are exempted

FEMA penalties and compounding provisions

Which authority must be informed if an Indian company maintains a Foreign Currency Account outside India?

Securities and Exchange Board of India

Ministry of Commerce

Export Credit Guarantee Corporation

Reserve Bank of India (through AD Bank)

Under FEMA regulations, within what time must funds realised in an overseas Foreign Currency Account (FCA) be repatriated to India?

Immediately on receipt

Within 7 days

By the end of the next month from the date of receipt

Within 6 months

Can balances from an overseas FCY Account be credited to an EEFC Account in India?

Yes, funds may be credited in INR or FCY to EEFC Account

Only if the exporter is also an SEZ unit

Only with specific RBI approval

No, they must always be converted into INR

Who holds the primary responsibility for ensuring FEMA compliance in respect of transactions through FCY Accounts?

The Indian exporter / account holder

Reserve Bank of India

Authorised Dealer (AD) Bank

Ministry of Finance

Interest earned on balances in an overseas FCY Account must be:

Converted into INR immediately

Retained abroad without restriction

Repatriated by the end of the next month after credit

Reported but not repatriated

Which of the following transactions is not permitted from an FCY Account outside India?

Advance remittances for imports In India

Receipt of export realisation

Payment of import obligations In India

Merchanting trade transactions

Who is responsible for regulatory reporting of FCY Account transactions under FEMA?

The foreign buyer

The AD bank in India

The Ministry of Commerce

The overseas bank holding the account

In case of export proceeds credited to an overseas FCY Account, what date is considered the date of realisation?

The date funds are credited in India

The date the exporter invoices the buyer

The date the AD bank closes the EDPMS entry

The date funds are credited in the FCY Account abroad

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