Exchange Earners Foreign Currency Account (
EEFC)
Exchange Earners Foreign Currency account is
an account maintained in foreign currency with an authorized dealer that is a
bank which deals in foreign exchange (FOREX). It is a facility provided to the
foreign exchange earners which includes exporters also to credit 100% of their
foreign exchange earnings to the account. By this account holders do not have
to convert foreign exchange into Rupees and vice versa which minimizes the
transaction cost.
an account maintained in foreign currency with an authorized dealer that is a
bank which deals in foreign exchange (FOREX). It is a facility provided to the
foreign exchange earners which includes exporters also to credit 100% of their
foreign exchange earnings to the account. By this account holders do not have
to convert foreign exchange into Rupees and vice versa which minimizes the
transaction cost.
All categories of foreign exchange earners
such as individuals companies who are resident in India, may open EEFC account.
EEFC account can be held in the form of a current account. No interest is
payable on EEFC account. 100% foreign exchange earnings can be credited to the EEFC
account provided that the sum total of the accruals in the account during a
calendar month should be converted into Indian Rupees (INR) on or before the last day of the succeeding
calendar month after adjusting for utilization of the balances for approved
purposes or forward commitments. Cheque facility is available for operation of
EEFC account.
such as individuals companies who are resident in India, may open EEFC account.
EEFC account can be held in the form of a current account. No interest is
payable on EEFC account. 100% foreign exchange earnings can be credited to the EEFC
account provided that the sum total of the accruals in the account during a
calendar month should be converted into Indian Rupees (INR) on or before the last day of the succeeding
calendar month after adjusting for utilization of the balances for approved
purposes or forward commitments. Cheque facility is available for operation of
EEFC account.
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The permissible credits
in the EEFC account are:
Inward remittance through normal banking channels, other
than remittance received on account of foreign currency loan or investment
received from abroad or received for meeting specific obligations by the
account holder.
than remittance received on account of foreign currency loan or investment
received from abroad or received for meeting specific obligations by the
account holder.
Payment received in foreign exchange by 100% export
oriented unit or a unit in export processing zone or software technology park
or hardware technology park for supply of goods to such similar unit or to a
unit in Domestic Tariff Area (DTA).
oriented unit or a unit in export processing zone or software technology park
or hardware technology park for supply of goods to such similar unit or to a
unit in Domestic Tariff Area (DTA).
Payments received in FOREX by a unit in DTA for supply of
goods to a unit in the Special Economic Zone (SEZ).
goods to a unit in the Special Economic Zone (SEZ).
Payment received by an exporter from an account
maintained with an authorized dealer for the purpose of countertrade.
maintained with an authorized dealer for the purpose of countertrade.
Advance remittance received by an exporter towards export
of goods or services.
of goods or services.
Payment received for export of goods and services from
India, out of funds representing repayment of credit state in US dollar held in
the account of the bank for Foreign Economic Affairs in Moscow (Russia) with an
authorized dealer in India.
India, out of funds representing repayment of credit state in US dollar held in
the account of the bank for Foreign Economic Affairs in Moscow (Russia) with an
authorized dealer in India.
Professional earnings including directors free,
consultancy fees, lecture fees, honorarium and similar other earnings received
by a professional by rendering services in his Individual capacity.
consultancy fees, lecture fees, honorarium and similar other earnings received
by a professional by rendering services in his Individual capacity.
Re-credit of unutilized foreign currency earlier
withdrawn from the account.
withdrawn from the account.
Amount representing repayment by the account holder’s
importer customer, of loan advance granted, to the exporter holding such
account.
importer customer, of loan advance granted, to the exporter holding such
account.
The disinvestment proceeds received by the resident
account holder on conversion of
shares held by him to ADR / GDR under the sponsored ADR/ GDR scheme approved by
Foreign Investment Promotion Board (FIPB) of the Government of India.
account holder on conversion of
shares held by him to ADR / GDR under the sponsored ADR/ GDR scheme approved by
Foreign Investment Promotion Board (FIPB) of the Government of India.
Permissible debits in EEFC
account are:
Payment outside India towards permissible
current account transaction in accordance with the provisions of Foreign Exchange
Management (Current Account Transactions) Rules, 2000 and permissible Capital Account
Transaction in accordance with the Foreign Exchange Management permissible
capital account transaction regulations 2000.
current account transaction in accordance with the provisions of Foreign Exchange
Management (Current Account Transactions) Rules, 2000 and permissible Capital Account
Transaction in accordance with the Foreign Exchange Management permissible
capital account transaction regulations 2000.
Payment in foreign exchange towards cost of
goods purchased from a 100% Export Oriented Unit (EOU) or a unit in Export Processing
Zone or Software Technology Park or Electronic Hardware Technology Park.
goods purchased from a 100% Export Oriented Unit (EOU) or a unit in Export Processing
Zone or Software Technology Park or Electronic Hardware Technology Park.
Payment of customs duty in accordance with
provisions of the Foreign Trade Policy of the Central Government for the time
being in force.
provisions of the Foreign Trade Policy of the Central Government for the time
being in force.
Trade related loans/advances extended 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.
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.
Payment in foreign exchange to a person
resident in India for supply of goods/ services including payments for airfare
and Hotel expenditure.
resident in India for supply of goods/ services including payments for airfare
and Hotel expenditure.
Some other important
points about EEFC accounts.
Foreign exchange earnings received through an
international credit card for which the reimbursement has been made in foreign
exchange may be regarded as a remittance through normal banking channel and it can
be credited to the EEFC account.
international credit card for which the reimbursement has been made in foreign
exchange may be regarded as a remittance through normal banking channel and it can
be credited to the EEFC account.
There is no restriction on withdrawal of
funds held in EEFC account in rupees. However the amount withdrawn in Rupees
shall not be eligible for conversion into foreign currency and for Re-credit to
the EEFC account.
funds held in EEFC account in rupees. However the amount withdrawn in Rupees
shall not be eligible for conversion into foreign currency and for Re-credit to
the EEFC account.
EEFC account holders are permitted to access
the forex market for purchasing foreign exchange only after utilizing fully the
available balances in the EEFC account.
the forex market for purchasing foreign exchange only after utilizing fully the
available balances in the EEFC account.
Accordingly authorized dealers are required
to obtain a declaration, while selling foreign exchange to their constituents.
to obtain a declaration, while selling foreign exchange to their constituents.
EEFC account balances can be hedged. The
balances in the account sold forward by the account holder has to remain earmarked
for delivery. However the contracts can be rolled over.
balances in the account sold forward by the account holder has to remain earmarked
for delivery. However the contracts can be rolled over.
Resident individuals have been permitted to
include resident close relatives as defined in Companies Act 1956 (amended in
2013) as a joint holder in his EEFC bank account. However they shall not be
eligible to operate the account during the lifetime of the resident account
holder.
include resident close relatives as defined in Companies Act 1956 (amended in
2013) as a joint holder in his EEFC bank account. However they shall not be
eligible to operate the account during the lifetime of the resident account
holder.
