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June 2012

A.P. (DIR Series) Circular No. 124, dated 10-5-2012 — Exchange Earner’s Foreign Currency (EEFC) Account.

By Gaurang Gandhi, Chartered Accountant
Reading Time 1 mins
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Presently, all foreign exchange earners are permitted to retain 100% of their foreign exchange earnings in their EEFC account. This Circular has modified the position as under, for holding of foreign exchange in EEFC account, Resident Foreign Currency (RFC) Account or Diamond Dollar Account (DDA):

(a) 50% of the balances in these accounts must be converted within 15 days from the date of this Circular into Rupee balances and credited to the Rupee accounts as per the directions of the account holder.

(b) In respect of all future foreign exchange earnings, an exchange earner is eligible to retain 50% (as against the previous limit of 100%) in non-interest bearing foreign currency accounts. The balance 50% shall be surrendered for conversion to Rupee balances.

(c) EEFC account holders henceforth will be permitted to access the foreign exchange market for purchasing foreign exchange only after utilising fully the available balances in the EEFC accounts.

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