India Introduces Changes to EEFC Account Norms

The Indian Government has introduced changes to the Exchange Earners' Foreign Currency Account (EEFC) norms. As part of the revision, exporters or individual professionals who have an EEFC account will now have to convert 50 percent of their balances into rupee balances, and they will also be given permission to purchase foreign exchange by accessing the forex market only after extinguishing their existing EEFC account balances.

In the year 2006, foreign exchange earners were allowed to hold their entire earnings in their EEFC accounts with any Authorized Dealer in India.

Following are the changes to be implemented:
I * EEFC account holders must convert 50 percent of their balances into rupee balances and credit it to their rupee accounts. Account holders have to comply with the new changes within a fortnight from the date of the circular and report to the Foreign Exchange Department.
II * The Exchange earners can retain 50 percent of foreign exchange earnings in their EEFC accounts that do not fetch any interest.
III * EEFC account holders have been given permission to access forex market where they can purchase foreign exchange post fully utilization of their EEFC account balances.

Also, the provisions of (II) and (III) will also be applicable to either a Resident Foreign Currency Account (RFC) or a Diamond Dollar Account (DDA) holder.

Please call/email for more details.
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This release was published on openPR.