15B.3
- Document type
- Manual
- Dated
- Category
- Exchange Management Manual
Foreign Currency Policies held by Residents
For purposes of Section 9 and 19 of FERA 1973, life insurance policies are regarded as securities. Foreign currency life insurance policies are, therefore, foreign securities for purpose of these provisions. Restrictions imposed on acquisition, holding and disposal of foreign securities without prior permission of Reserve Bank under Section 19(1)(e) of the Act are, therefore, applicable to foreign currency life insurance policies. Persons resident in India holding foreign currency life insurance policies should declare them to Reserve Bank and obtain licences for holding them except where they are covered under the general exemption (See Note below). Applications for obtaining licences should be made to the Central Office of Reserve Bank(Non-residents Foreign Accounts Division). While granting holding licences, Reserve Bank will stipulate that maturity proceeds or any claim amounts due on the policies should be repatriated to India through an authorised dealer.
NOTE: In terms of Reserve Bank Notification No. FERA.118/92-RB dated 7th September 1992, persons who have returned to India after being a non-resident for a minimum continuous stay of one year abroad have been granted exemption from the requirement of obtaining permission of Reserve Bank for holding any life insurance policies taken out of foreign exchange lawfully acquired by them while they were resident outside India. They would also be free to retain the maturity proceeds or any claim amounts received on such policies in their foreign currency accounts in India (RFC accounts) or abroad.