What is an EEFC Account?

Exchange Earners' Foreign Currency (EEFC) account is foreign currency-denominated account

maintained with banks dealing with foreign exchanges. The Reserve Bank of India introduced this
scheme in 1992 to enable exporters and professionals to retain their foreign exchange receipts in
banks without converting it into the local currency. Any person residing in India who receives inward
remittances in foreign currency or a company with foreign currency earnings can open EEFC account
but they don't earn any interest from the deposits and it is a non-interest bearing scheme.
What is the minimum balance for EEFC?
This is typically a zero-balance account like normal current accounts. In other words, this means no
account holder needs to maintain an average or minimum balance in the EEFC account.
How does EEFC help exporters or individuals earn foreign currency receipts?
As the account is maintained in foreign currency, no depositors are protected from exchange rate
fluctuations.
Is there any prescribed limit of deposits in EEFC?
There is no such limit. One can credit his or her entire foreign exchange earnings into this account,
subject to some permissible credits.
Can one take a foreign currency loan and put it in EEFC?
Remittances received on account of foreign currency loan or investment received from abroad can't
be deposited in EEFC.
What are the permissible credits in this account?
a) Inward remittances received by an individual
b) payments received by a 100% export-oriented unit, export processing zone, software technology
park and electronic hardware technology park
c) payments received in foreign exchange by a unit in domestic tariff area for supply of goods to a
unit in SEZ
d) payment received by an exporter for an account maintained with an authorised dealer for the
purpose of counter trade, which is an adjustment of value of goods imported against value of goods
exported
e) advance remittance received by an exporter towards export of goods or services
Can one withdraw in rupees from EEFC account?
There is no such restriction on withdrawal in rupees of funds held in an EEFC account. However, the
amount withdrawn in rupees can't be converted into foreign currency again and re-credited to the
account.

Brief Write up on EEFC Account

Ahmedabad | Mumbai | Surat

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Pipara & Co., Chartered Accountants

www.pipara.com

Can one make a payment directly from EEFC account?

One can make a direct payment from EEFC outside India as per the provisions laid down in FEMA
regulations. Fully export-oriented units can also pay in foreign exchange for purchasing goods as per
the country's foreign trade policy. A person residing in India can use the account for paying airfare or
hotel expenditure.

Source: Economic Times

Brief Write up on EEFC Account

Ahmedabad | Mumbai | Surat

|
|

Pipara & Co., Chartered Accountants

www.pipara.com