A multi-currency account is one account that holds, converts and spends money in many currencies. It is used by people who live, work or travel in more than one country, and by companies that buy and sell across borders. An ordinary Indian bank account holds only rupees.
A multi-currency account has a separate balance for each currency, such as dollars, euros, pounds and rupees. Often each balance has its own local account details. So a customer in Europe can pay into the euro balance as if it were a local European account. The account holder can keep money in a currency, or convert it to another currency at a time they choose. They can also pay out in any currency, and many accounts come with a card that spends in the local currency.
Why does that matter? Every time money is converted, someone may add a margin to the exchange rate, called a forex markup. A company that receives dollars and pays suppliers in dollars loses money if it converts twice. With a multi-currency account, it keeps the dollars as dollars.
Consider a small furniture exporter in Jodhpur. A buyer in Germany pays her €10,000 into her euro balance. She also buys hardware from a supplier in the Netherlands for €2,000, which she pays from the same euro balance, with no conversion. She converts the remaining €8,000 into rupees only when she needs to pay her workers in India. That conversion is the only time a markup applies.
For money coming in, a multi-currency account often works with cross-border payment collection, which receives payments from foreign clients and marketplaces. For larger companies, the balances feed a treasury management system, where the finance team watches how much cash it holds in each currency. A merchant of record that sells software in many countries may also hold its income in this way.
People abroad use multi-currency accounts too. A nurse in London may hold pounds and send money home through a remittance app when the rupee rate is good.
In India, individuals and companies holding money abroad must follow the Foreign Exchange Management Act (FEMA) and RBI's rules on foreign currency accounts. For example, an Indian exporter may keep export income in a foreign currency account with a bank abroad, and pay for imports from it. But the exporter must bring the unused balance back to India, usually by the end of the month after the money was received.