RBI/2011-12/547
A. P. (DIR Series) Circular No. 124
May 10, 2012
To
AD Category I Authorised Dealer Banks
Madam/ Sir,
Exchange Earner's
Foreign Currency (EEFC) Account
1. Attention of
Authorised Dealer Category - I (AD Category - I) banks is invited to A.P. (DIR
Series) Circular No.15 dated November 30, 2006 in terms of which all foreign exchange earners were permitted to retain
100% of their forex earnings in EEFC account with any AD in India.
2. On a review of the
Scheme, it has been decided as under :-
a) 50% of the balances
in the EEFC accounts should be converted forthwith into rupee balances and
credited to the rupee accounts as per the directions of the account
holder. This process may be completed within a fortnight from the date of
the circular and compliance reported to the Chief General Manager, Foreign
Exchange Department, Central Office, Trade Division, Amar Building, Sir P.M.
Road, Fort, Mumbai 400 001
b) In respect of all
future forex earnings, an exchange earner is eligible to retain 50% (as against
the previous limit of 100%) in non-interest bearing EEFC accounts. The
balance 50% shall be surrendered for conversion to rupee balances.
c) The facility of EEFC
scheme is intended to enable exchange earners to save on conversion/transaction
costs while undertaking forex transactions in future. This facility is not
intended to enable exchange earners to maintain assets in foreign
currency, as India is still not fully convertible on Capital Account.
Accordingly, EEFC account holders henceforth will be permitted to access the
forex market for purchasing foreign exchange only after utilising fully the
available balances in the EEFC accounts. ADs may, accordingly, obtain a
declaration while selling foreign exchange to their constituents.
3. It may be noted that
the provisions at paragraph 2(b) and 2(c) above will apply, mutatis mutandis,
also to holder of either a Resident Foreign Currency Account (RFC)
or a Diamond Dollar Account (DDA).
4. AD Category - I banks
may bring the contents of this circular to the notice of their constituents and
customers concerned.
5. The directions
contained in this circular have been issued under Sections 10(4) and 11(1) of
the Foreign Exchange Management Act, 1999 (42 of 1999) and are without
prejudice to permissions / approvals, if any, required under any other law.
Yours faithfully,
(Rashmi Fauzdar)
Chief General Manager
Do ever had a feeling that the IT department is stealing your hard-earned money with retrospective amendments this day?? Well we can't say if that is true or not but now there is someone who is even stealing the IT Departmnet!!
