Foreign currency accounts by a person resident in India

Continued.....................

(D) A Unit in a Special Economic Zone (SEZ) 

A unit located in a Special Economic Zone may open hold and maintain a Foreign Currency Account with an authorized dealer in India provided that, 

(a) all foreign exchange funds received by the unit in the Special Economic Zone (SEZ) are credited to such account, 

(b) no foreign exchange purchased in India against rupees shall be credited to the account without prior permission from the Reserve Bank, 

(c) the funds held in the account shall be used for bona fide trade transactions of the unit in the SEZ with the person resident in India or otherwise, 

(d) the balances in the accounts shall be exempt from the restrictions imposed under Rule 5, except item 1(ii) of the Schedule III, of the Government of India Notification No.GSR.381(E) dated May 3, 2000, as amended from time to time. 

Provided that the funds held in these accounts shall not be lent or made available in any manner to any person or entity resident in India not being a unit in Special Economic Zones.

To be Continued........