Exchange Earners Foreign Currency Account Scheme :
Under The Regulations of the Foreign Exchange Management (Foreign Currency Accounts, a person resident in India may open / hold and maintain with an authorized dealer in India. Exchange Earners Foreign Currency Account in the form of non-interest bearing current account only subject to following terms & conditions.
Limit up to which foreign currency may be credited to EEFC account :
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 may credit up to 70 per cent and any other person resident in India may credit up to 50 per cent of the following to the EEFC Account namely….
Inward remittance through normal banking channel other than the remittance received pursuant to any undertaking given to the Reserve Bank or which represents foreign currency load raised or investment received from outside India by the account holder
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
Payment received by an exporter from an account maintained with an authorized dealer for the purpose of counter trade in accordance with the approval granted in terms of Regulation of the Foreign Exchange Management (Export of Goods and Services) Regulations
Advance remittance received by an exporter towards export of goods or services
Payment received for export or 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 authorized dealer in India
Provided that the Reserve bank may, on an application made to it and on being satisfied that it is necessary to do so, grant permission to hold higher percentage of inward remittance / payments in foreign exchange in the EEFC account
Except to the extent provided in sub-paragraph above, no payment received in foreign exchange by the account holder from any other person resident in India shall be credited to an EEFC account.
: For the purpose of the sub-paragraph above payment received through an international credit card for which reimbursement will be provided in foreign exchange may be regarded as a remittance through normal banking channels.
Permissible credits to EEFC account
Following credits may be made to an EEFC Account, namely….
A portion of inward remittance / payment received by the recipient in foreign exchange subject to the provisions of paragraph above
Interest earned on the funds held in the account
Recredit of unutilized foreign currency earlier withdrawn from the account
Amount representing repayment by the account holder's importer customer of loan / advances granted in terms of the clause
Permissible debits to the EEFC account
Following debits may be made to an EEFC Account, namely….
Payment outside India towards a current account transaction in accordance with the provisions of the Foreign Exchange Management (Current Account Transactions) Rules and towards a capital account transaction permissible under the Foreign Exchange Management (Permissible Capital Account Transactions) Regulations.
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
Payment of customs duty in accordance with the provisions of Export Import Policy of Central Government for the time being in force
Trade related loans / advances, not exceeding US $ 3 million, 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
Payment in foreign exchange to a person resident in India for supply of goods/services including payments for air fare and hotel expenditure
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 recredit to the account.
Authorized dealer may issue cheque books of separate series with the superscription 'EEFC Account' to the account holders maintaining such accounts, and also satisfy himself while honoring the cheques that the payment made by the account holder by issue of a cheque is permissible under these Regulations
It is further advised that all the EEFC accounts should be held in the form of non interest bearing current accounts only and no credit facility whether funded or non funded should be made available against EEFC balances.
Miscellaneous provisions for EEFC Account of a unit in a Special Economic Zone
Save as otherwise provided in this paragraph, nothing contained in paragraphs above shall apply to a unit in a Special Economic Zone.
A unit in a Special Economic Zone may credit to its EEFC Account all its receipts upto 100% in foreign exchange except the following namely Acquisition of foreign exchange by purchase against rupees from any person resident in India other than a unit in a Special Economic Zone
Paragraphs above shall mutatis mutandis apply to the EEFC account of such units.
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