(This post elucidates information on who can open EEFC account, the documents required for opening EEFC account, what are the permissible credits and permissible debits allowed in the EEFC account)
What is EEFC account?
Ans.: EEFC account is the abbreviation of Exchange Earners Foreign Currency account. In this account the account holder maintains a current account in foreign currency like USD,GBP,Euro, JPY etc.
Q: Who can open EEFC account?
Ans.: Any person who earns foreign exchange such as individuals, companies, etc. who are resident in India, can open EEFC accounts.
Q: what are the information/documents required for opening EEFC account?
If a new customer wants open EEFC account, the applicant need to first open a current account with the Bank and then open EEFC account. If the applicant is enjoying credit facilities then NOC from the Lending Bank(s) is required. The duly filled in signed EEFC account opening form shall be accompanied with the following.
Q: What type of inward remittances can be credited to EEFC account?
Ans.: The following rules apply for crediting inward remittance to EEFC account.
Q: Whether payments received on account of goods supplied to unit in SEZ or disinvestment proceeds of ADR/GDR can be credited to EEFC account?
Ans.: The payments received in foreign exchange by a unit in the Domestic Tariff Area, for supply of goods to a unit in the Special Economic Zone (SEZ) including Export Processing Zone or Software Technology Park or Electronic Hardware Technology Park in India are treated as inward remittance for the purpose. The disinvestment proceeds of ADR/GDR Scheme approved by the Foreign Investment Promotion Board of the Government of India are also treated as inward remittance and therefore permitted to be credited to EEFC account.
Q: What are the permissible debits in EEFC Account?
The following type debits in EEFC account are allowed.
EEFC account holders are permitted to purchase foreign exchange from Forex market only after utilizing fully the available balances in the EEFC accounts. ADs are obtaining a declaration, in this effect, while selling foreign exchange to their EEFC account holders.
Q: Whether cheque book is issued to EEFC account?
Ans.: The AD branch maintaining EEFC account may issue separate Current Account cheque book with the superscription “EEFC Account” on each cheque leaf. The Bank must satisfy that the payment made by the account holder is permissible under FEMA Regulations, while honouring the cheques.
Q: Whether the account holder earns interest on foreign currency deposit held in the bank?
Ans.: No interest will be paid on balance held in the account.
Q: Whether nomination is allowed?
Ans.: Nomination facility is allowed only to Individual and Sole Proprietor. However, nominee’s consent for the same is required.
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