EEFC

Exchange Earners' Foreign Currency (EEFC) Account

Replies (9)

1. What is an EEFC Account?

Exchange Earners' Foreign Currency Account (EEFC) is an account maintained in foreign currency with an Authorised Dealer, i.e a bank dealing in foreign exchange.

2. Can the account be in term deposit form?

No, the account is a Non-interest bearing current account.

3. Who can open an EEFC account?

A person resident in India may open the account.

4. Can one credit the entire foreign exchange earnings in this account?

Yes, one can credit 100 percent of his foreign exchange earnings into this account subject to permissible credits and debits.

5. What are the permissible credits into this account?

i) Inward remittance through normal banking channel, other than remittances received on account of foreign currency loan or investment received from abroad or received for meeting specific obligations by the account holder.

ii )Payments received in foreign exchange by a 100 per cent Export Oriented Unit or a unit in (a) Export Processing Zone or (b) Software Technology Park or (c) Electronic Hardware Technology Park for supply of goods to similar such unit or to a unit in Domestic Tariff Area.

iii) Payments received in foreign exchange by a unit in Domestic tariff Area for supply of goods to a unit in Special Economic Zone (SEZ);

iv) Payment received by an exporter from an account maintained with an authorised dealer for the purpose of counter trade. (Counter trade is an arrangement involving adjustment of value of goods imported into India against value of goods exported from India in terms of Reserve Bank guidelines);

v) Advance remittance received by an exporter towards export of goods or services;

vi) Payment received for export of goods and services from India, out of funds representing repayment of State Credit in U.S. dollar held in the account of Bank for Foreign Economic Affairs, Moscow, with an authorised dealer in India,

vii) Professional earnings including directors fees, consultancy fees, lecture fees, honorarium and similar other earnings received by a professional by rendering services in his individual capacity.

viii) Interest earned, if any, on the funds held in the account;

ix) Re-credit of unutilised foreign currency earlier withdrawn from the account;

x) Amount representing repayment by the account holder's importer customer, of loan/advances granted, by the exporter holding such account.

6. Can foreign exchange earnings received through an international credit card be credited to the EEFC account?

Yes, foreign exchange earnings received through an international credit card for which reimbursement are provided in foreign exchange may be regarded as a remittance through normal banking channels and can be credited to the EEFC account.

7. What are the permissible debits into this account?

i) Payment outside India towards a permissible current account transaction [in accordance to the provisions of the Foreign Exchange Management (Current Account Transactions) Rules, 2000] and permissible capital account transaction [in accordance to the Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000].
ii) Payment in foreign exchange towards cost of goods purchased from a 100 percent Export Oriented Unit or a Unit in (a) Export Processing Zone or (b) Software Technology Park or (c) Electronic Hardware Technology Park and payment of customs duty in accordance with the provisions of the Foreign Trade Policy of Central Government for the time being in force.

iii) Trade related loans/advances, by an exporter holding such account to his importer customer outside India, subject to compliance with the Foreign Exchange Management (Borrowing and Lending in Foreign Exchange) Regulations, 2000.

iv) Payment in foreign exchange to a person resident in India for supply of goods/services including payments for airfare and hotel expenditure.

8. Is there any restriction on withdrawal in rupees of funds held in an EEFC account?

No, there is no restriction on withdrawal in rupees of funds held in an EEFC account. However, the amount withdrawn in rupees shall not be eligible for conversion into foreign currency and for re-credit to the account.

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