FEMA, Foreign Currency Accounts By Person Resident in India, Regulations 2000.
Short title and commencement
Restriction on holding foreign currency account by a person resident in India
Opening, holding and maintaining an Exchange Earner’s Foreign Currency Account
Opening, holding and maintaining a Resident Foreign Currency Account
Opening, holding and maintaining a Resident Foreign Currency (Domestic) Account
Opening, holding and maintaining a Foreign Currency Account in India in certain
other cases
Opening, holding and maintaining a Foreign Currency Account outside India
Limit on holding
in a Foreign Currency Account
Types of accounts
Remittances out of the accounts after the account holder’s death
Responsibility of authorised dealers maintaining foreign currency accounts
6A. Foreign Currency Account of a unit in a Special Economic Zone
Foreign Exchange Management (Foreign Currency Accounts by a Person
Resident in India) Regulations, 2000
Notification No.FEMA 10/2000-RB dated 3rd May 2000 - In
exercise of the powers conferred by clause (b) of Section 9 and clause (e) of
sub-section (2) of Section 47 of the Foreign Exchange Management Act, 1999 (42
of 1999), the Reserve Bank of India makes the following regulations for opening,
holding and maintaining of Foreign Currency Accounts and the limits upto which
amounts can be held in such accounts by a person resident in India, namely:
- Short title and commencement
- These Regulations may be called the Foreign Exchange Management
(Foreign Currency Accounts by a Person Resident in India) (Amendment)
Regulations, 2004.
- They shall come into force from the date of their publication in the
Official Gazette.
(Above sub-regulations (i) & (ii) has been amended vide , Dt.
06/03/2004)
"Pre-Revised
- These Regulations may be called the Foreign Exchange Management
(Foreign Currency Accounts by a person resident in India) (First
Amendment) Regulations, 2004
- They shall come into force on their publication in the Official
Gazette.
(Above sub-regulations (a) & (b) has been amended vide Notification No.
FEMA 109/2004-RB, Dt. 01/01/2004)"
- These Regulations may be called the Foreign Exchange Management
(Foreign Currency Accounts by a Person Resident in India) (Fourth
Amendment) Regulations, 2003.
- They shall come into force from the date of their publication in the
Official Gazette.
(Above sub-regulations i. & ii. has been amended vide, Dt. 07/06/2003)
- Short title and commencement
- These regulations may be called the Foreign Exchange Management
(Foreign Currency Accounts by a Person Resident in India ) (Third
Amendment) Regulations, 2003.
- They shall come into force on their publication in the Official
Gazette.
(Above sub-regulations (a) & (b) has been amended vide Notification No.
FEMA 90/2003-RB, Dt. 23/05/2003)
- Short title and commencement :
- These Regulations may be called the Foreign Exchange Management
(Foreign Currency Account by a person Resident in India ) (Second
Amendment) Regulations, 2003.
- They shall come into force from the date of their publication in the
Official Gazette.
(Above sub-regulations a. & b. has been amended vide Notification No.
FEMA 89/2003-RB, Dt. 29/04/2003)
- These Regulations may be called the Foreign Exchange Management
(Foreign Currency Account by a Person Resident in India) (Amendment)
Regulations, 2003.
- They shall come into force from the date of their publication in the
Official Gazette.
(Above sub-regulation (a) & (b) has been amended vide Notification No. )
- These Regulation may be called the Foreign Exchange Management
(Foreign Currency Accounts by a Person Resident in India) (Sixth
Amendment) Regulations, 2002.
- They shall come into force on the date of their publication in the
official gazette.
(Above sub-regulations (i) & (ii) has been amended vide Notification No.
FEMA 77/2002-RB, Dt. 25/11/2002)
- Short title and commencement
- These Regulations may be called the Foreign Exchange Management
(Foreign Currency Accounts by a Person Resident in India) (Fifth
Amendment) Regulations, 2002.
- They shall come into force on their publication in the Official
Gazette.
(Above sub-regulations a. & b. has been amended vide Notification No.
FEMA 74/2002-RB, Dt. 01/11/2002)
- These Regulations way be called the Foreign Exchange Management
(Foreign Currency Accounts by a person resident in India) (Fourth
Amendment) Regulations, 2002.
- They shall come into force on the date of their publication in the
official Gazette.
(Sub-regulations (i) & (ii) has been amended vide Notification No. FEMA
69/2002-RB, Dt. 26/08/2002)
-
- These Regulations may be called the Foreign Exchange Management
(Foreign Currency Accounts by a Person Resident in India) ( Third
Amendment) Regulations, 2002.
- They shall come into force on their publication in the Official
Gazette.
(Sub-regulations (i) & (ii) has been amended vide Notification No. FEMA
63/2002-RB, Dt. 21/06/2002)
These Regulations may be called the Foreign Exchange Management (Foreign
Currency Accounts by a Person Resident in India) (Second Amendment)
Regulations, 2002.
They shall come into force on the date of their publication in the
official Gazette.
(Above Short title and commencement has been amended vide FEMA Ntf. No.
58/2002-RB, Dt. 01/04/2002)
i. These Regulations may be called the Foreign Exchange Management
(Foreign Currency Accounts by a Person Resident in India) (Amendment)
Regulations, 2002.
ii. They shall come into force from the date of their publication in the
Official Gazette.
(Above sub-regulations (i) & (ii) has been amended vide Fema
Notification No. 51/2002-RB, Dt. 27/02/2002)
-
- These Regulations may be called the Foreign Exchange Management
(Foreign Currency Accounts by a Person Resident in India) (Second
Amendment) Regulations, 2001.
- They shall come into force with immediate effect.
(Above sub-regulations (i) & (ii) has been amended vide FEMA
Notification No. 47/2001-RB dated 05/12/2001)
"Pre-Revised
- Short title and commencement
- These Regulations may be called the Foreign Exchange Management
(Foreign Currency Accounts by a Person Resident in India) (Amendment)
Regulations, 2001.
- They shall come into force with immediate effect."
(Above sub-regulations (i) & (ii) had been amended vide Notification No.
37/2001-RB dated 27/02/2001)
(Above sub-regulations (a) & (b) had been amended vide Notification No.
34/2001-RB dated 22/01/2001)
(Above sub-regulations (i) & (ii) had been amended vide Notification No.
30/2000-RB dated 17/11/2000)
(Above sub-regulations (i) & (ii) had been amended vide Notification No.
27/2000-RB dated 14/08/2000) "
- Definitions :-
In these Regulations, unless the context otherwise requires, -
- ‘Act’ means the Foreign Exchange Management Act, 1999 (42 of 1999);
- ‘Authorised dealer’ means a person authorised as an authorised
dealer under sub-section (1) of section 10 of the Act;
- ‘Foreign Currency Account’ means an account held or maintained in
currency other than the currency of India or Nepal or Bhutan;
- ‘Schedule’ means a schedule to these Regulations;
- the words and expressions used but not defined in these Regulations
shall have the same meanings respectively assigned to them in the Act.
-
Restriction on holding foreign currency account by a person resident in
India :-
Save as otherwise provided in the Act or rules or regulations made
thereunder, no person resident in India shall open or hold or maintain a
Foreign Currency Account:
Provided that a Foreign Currency Account held or maintained before the
commencement of these Regulations by a person resident in India with
special or general permission of the Reserve Bank, shall be deemed to be
held or maintained under these Regulations :
Provided further that the Reserve Bank, may on an application made to
it, permit a person resident in India to open or hold or maintain a
Foreign Currency Account, subject to such terms and conditions as may be
considered necessary.
-
Opening, holding and maintaining an Exchange Earner’s Foreign Currency
Account :-
A person resident in India may open, hold and maintain with an
authorised dealer in India, a Foreign Currency Account to be known as
Exchange Earner’s Foreign Currency (EEFC) Account, subject to the terms
and conditions of the Exchange Earners’ Foreign Currency Account Scheme
specified in the Schedule.
(Please refer Circular No. 22/2003-04-RB, Dt. 24/09/2003 for Export of
Goods and Services - Payment of Claims by ECGC)
(Please refer Circular. No. 21/2003-04-RB, DT. 23/09/2003 for Regulation
4 and 5A )
(Pl. refer A.P.(DIR Series) Circular No. 34/2002-RB, Dt. 01/04/2002 for
Facilities to Status Holder Exporters - Credit to the EEFC account)
-
Opening, holding and maintaining a Resident Foreign Currency Account :-
- A person resident in India may open, hold and maintain with an authorised dealer in India a Foreign Currency Account, to be known as a
Resident Foreign Currency (RFC) Account, out of foreign exchange –
- received as pension or any other superannuation or other monetary
benefits from his employer outside India; or
- realised on conversion of the assets referred to in sub-section (4)
of section 6 of the Act, and repatriated to India; or
- received or acquired as gift or inheritance from a person referred
to in sub-section (4) of section 6 of the Act; or
- referred to in clause (c) of section 9 of the Act, or acquired as
gift or inheritance therefrom.
- received as the proceeds of life insurance policy
claims/maturity/surrender values settled in foreign currency from an
insurance company in India permitted to undertake life insurance
business by the Insurance Regulatory and Development Authority.
(Above sub-clause (d) has been added vide Notification No. FEMA
109/2004-RB, Dt. 01/01/2004
- The funds in a Resident Foreign Currency Account opened or held or
maintained in terms of sub-regulation (1) shall be free from all
restrictions regarding utilisation of foreign currency balances
including any restriction on investment in any form, by whatever name
called, outside India.
5A.
Opening, holding and maintaining a Resident Foreign Currency (Domestic)
Account
- A resident Individual
"Pre-Revised -A person resident in India " may open, hold and maintain
with an Authorised Dealer in India a foreign currency account, to be
known as Resident Foreign Currency (Domestic) Account, out of foreign
exchange acquired in the form of currency notes, bank notes and
travellers cheques :
(In above sub-regulations (1) words before OLD has been substituted vide
Notification No. FEMA 109/2004-RB, Dt. 01/01/2004).
- while on a visit to any place outside India by way of payment for
services not arising from any business in or anything done in India; or
- from any person not resident in India and who is on a visit to India,
as honorarium or gift or for services rendered or in settlement of any
lawful obligation; or
- by way of honorarium or gift while on a visit to any place outside
India; or
- represents the unspent amount of foreign exchange acquired by him
from an authorised person for travel abroad.
- as gift from a close relative;
Explanation : For the purpose of this clause, "close relative'' means
relatives as defined in Section 6 of the Companies Act, 1956.
- by way of earning through export of goods / services, or as royalty,
honorarium or by any other lawful means;
- representing the disinvestment proceeds received by the resident
account-holder on conversion of shares held by him to ADRs / DGRs under
the Sponsored ADR / GDR Scheme approved by the Foreign Investment
Promotion Board of Government of India.
(Clause e. to g. has been added vide Notification No. FEMA 90/2003-RB,
Dt. 23/05/2003)
- by way of earnings received as the proceeds of life insurance policy
claims/maturity/surrender values settled in foreign currency from an
insurance company in India permitted to undertake life insurance
business by the Insurance Regulatory and Development Authority.
(Above sub-clause h. has been added vide Notification No. FEMA
109/2004-RB, Dt. 01/01/2004)
- Debits to the account shall be for payments towards a current
account transaction in accordance with the provisions of the Foreign
Exchange Management (Current Account Transactions) Rules, 2000 and
towards a capital account transaction permissible under the Foreign
Exchange Management (Permissible Capital Account Transactions)
Regulations, 2000.
- The account shall be maintained in the form of Current Account and
shall not bear any interest.
- There shall be no ceiling on the balances in the account."
(Above regulations 5A has been added vide Notification No. FEMA
74/2002-RB, Dt. 01/11/2002)
-
Opening, holding and maintaining a Foreign Currency Account in India in
certain other cases :-
A shipping or airline company incorporated outside India or its agent in
India may open, hold and maintain a Foreign Currency Account with an
authorised dealer in India for meeting the local expenses in India of
such airline or shipping company:
Provided that the credits to such accounts are only by way of freight or
passage fare collections in India or by inward remittances through
normal banking channels from its office outside India and, in the case
of agent, from his principal outside India.
-
Opening, holding and maintaining a Foreign Currency Account
outside India :-
- An authorised dealer in India may open, hold and maintain with his
branch or head office or correspondent outside India, a Foreign Currency
Account for the purpose of transacting foreign exchange business and
other matters incidental thereto, in accordance with the provisions of
the Act or the rules or regulations made or the directions issued
thereunder.
- A branch outside India of a bank incorporated or constituted in
India may open, hold and maintain with a bank outside India, a Foreign
Currency Account for the purpose of carrying on normal banking business
outside India, subject to compliance with the directions or guidelines
issued from time to time by the Reserve Bank, and the regulatory
authority in the country where the branch is located.
- A shipping or airline company incorporated in India may open, hold
and maintain with a bank outside India, a Foreign Currency Account for
the purpose of undertaking transactions in the ordinary course of its
business.
- Life Insurance Corporation of India or General Insurance Corporation
of India and its subsidiaries may open, hold and maintain with a bank
outside India, a Foreign Currency Account for the purpose of meeting the
expenditure incidental to the insurance business carried on by them and
for that purpose, credit to such account the insurance premia received
by them outside India.
(4A) A firm or a company or a body corporate registered or incorporated
in India (hereinafter referred to as ‘the Indian entity’) may open, hold
and maintain in the name of its office (trading or non-trading) or its
branch set up outside India or its representative posted outside India,
a foreign currency account with a bank outside India by making
remittances from India for the purpose of normal business operations of
the office/branch or representative;
Provided that -
- the overseas branch/office has been set up or representative is
posted overseas for conducting normal business activities of the
Indian entity;
- the total remittances made under this sub-Regulation by the
Indian entity, to all such accounts in an accounting year shall not
exceed
- 2 per cent of the average annual sales/income or turnover
during last two accounting years of the Indian entity, where the
remittances are made to meet initial expenses of the branch or
office or representative,
and
- 1 per cent of such average annual sales/income or turnover
where the remittances are made to meet recurring expenses of the
branch or office or representative;
- the overseas branch/office/representative shall not enter in any
contract or agreement in contravention of the Act, Rules or
Regulations made thereunder;
- the account so opened, held or maintained shall be closed,
- if the overseas branch./office is not set up within six
months of opening the account, or
- within one month of closure of the overseas branch/office,
or
- where no representative is posted for six months.
and the balance held in the account shall be repatriated to
India;
Provided further that the restriction contained in clause (b) of
the first proviso shall not apply in a case where -
- the remittances to the account maintained under this
sub-Regulation are made out of funds held in EEFC account of the
Indian entity, or
- the overseas branch/office is set up or representative posted
by a 100% EOU or a unit in EPZ or in a Hardware Technology Park
or in a Software Technology Park, within two years of
establishment of the Unit.
Explanation: For the purpose of this sub-Regulation,
- Purchase of acquisition of Office equipments and other assets
required for normal business operations of the overseas
branch/office/representative will not be deemed as a capital
account transaction;
- Transfer or acquisition of immovable property outside India,
other than by way of lease not exceeding five years, by the
overseas branch/office/representative will be subject to the
Foreign Exchange Management (Acquisition and Transfer of
Immovable Property outside India) Regulations, 2000".
(Above sub-regulation (4A) has been inserted vide
FEMA Notification No. 47/2001-RB dated 05/12/2001)
- A person resident in India, being an exporter who has
undertaken a construction contract or a turnkey project outside
India or who is exporting services or engineering goods from
India on deferred payment terms may open, hold and maintain a
Foreign Currency Account with a bank outside or in India
"PRE-Revised " Foreign Currency Account with a bank outside
India ", provided that -
(In clause (5) words before OLD has been substituted vide
Notification.No. FEMA 87/2003-RB, Dt. 20/03/2003)
- approval as required under the Foreign Exchange Management
(Export of goods and services) Regulations, 2000 has been
obtained for undertaking the contract/project/export of goods or
services, and
- Foreign Currency Accounts by a Person Resident in India the
terms and conditions stipulated in the letter of approval have
been duly complied with.
(Please refer Circular. No. 20/2003-04-RB, DT. 23/09/2003 for
Regulation 7(5))
- A person resident in India who has gone abroad for studies
or who is on a visit to a foreign country may open, hold and
maintain a Foreign Currency Account with a bank outside India
during his stay outside India, provided that on his return to
India, the balance in the account is repatriated to India :
Provided that short visits to India by a person who has gone
abroad for studies, before completion of his studies, shall not
be treated as his return to India.
- A person resident in India who has gone out of India to
participate in an exhibition/ trade fair outside India may open,
hold and maintain a Foreign Currency Account with a bank outside
India for crediting the sale proceeds of goods on display in the
exhibition/trade fair :
Provided that the balance in the account is repatriated to India
through normal banking channels within a period of one month
from the date of closure of the exhibition/trade fair.
- A national of a foreign state resident in India being an
employee of a foreign company or a citizen of India employed by
a foreign company outside India and in either case on deputation
[OLD - A national of a foreign state resident in India being an
employee of a foreign company on deputation ] to the
office/branch/subsidiary/joint venture in India of such foreign
company may open, hold and maintain a foreign currency account
with a bank outside India and received the salary payable to him
for the services rendered to the office/branch/subsidiary/joint
venture in India of such foreign company, by credit to such
account;
(Bold words in sub-regulations (8) has been substituted vide
Notification No. FEMA 89/2003-RB, Dt. 29/04/2003)
Provided that,
- the amount to be credited to such account shall not exceed 75
per cent of the salary accrued to or received by such person
from the foreign company;
- the remaining salary shall be paid in rupees in India;
- Income tax chargeable under the Income Tax Act 1961 is paid
on the entire salary as accrued in India."
( In regulation 7 above para (8) has been added vide
Notification No. 34/2001-RB dated 22/01/2001)
- Limit on holding in a Foreign Currency Account :-
Unless otherwise stipulated by the Reserve Bank, a person
resident in India who has opened and is maintaining a Foreign
Currency Account in accordance with the provisions of
Regulations 6 and 7, may hold therein foreign exchange without
any limit.
- Types of accounts :-
A Foreign Currency Account with an authorised dealer in India under these
Regulations may be opened, held and maintained -
- in the form of current or savings or term deposit account in cases
where the account holder is an individual, and in the form of current
account or term deposit account in all other cases;
"Provided that the EEFC Account referred to in Regulation 4, shall be
opened, held or maintained in the form of a non-interest bearing current
account only;"
(Above proviso has been amended vide Notification No. 30/2000-RB
dated 17/11/2000)
"Pre-Revised
"Provided that the EEFC Account referred to in Regulations 4, shall not
be opened, held and maintained in the form of a term deposit account/"]
(In sub-regulation (1), above proviso had been inserted vide
Notification No. 27/2000-RB dated 14/08/2000)
- singly or jointly in the name of person eligible to open, hold and
maintain such account.
-
Remittances out of the accounts after the account holder’s death
:-
On the death of a foreign currency accountholder, -
- the authorised dealer with whom the account is held or maintained
may remit to a nominee being a person resident outside India, funds to
the extent of his share or entitlement from the account of the deceased
accountholder;
- a nominee being a person resident in India, who is desirous of
remitting funds outside India out of his share for meeting the
liabilities abroad of the deceased, may apply to the Reserve Bank for
such remittance.
-
Responsibility of authorised dealers maintaining foreign
currency accounts :-
An authorised dealer maintaining foreign currency accounts shall -
- comply with the directions issued by the Reserve Bank from time to
time; and
- submit periodic return or statement, if any, as may be stipulated by
the Reserve Bank .
Schedule
(See Regulation 4)
Exchange Earner’s Foreign Currency (EEFC) Account Scheme
- Limit up to which foreign currency may be credited to EEFC
account
- An entity or a person specified in column I of the Table below may
credit to the EEFC Account an amount upto tine limit specified in Column
2 thereof from out of the foreign exchange earnings specified in
sub-paragraph (iA), namely;
| Entity/Person |
Limit (per cent) |
| 1. A Status Holder Exporter (as defined in EXIM policy in
force) |
100 |
| 2. A resident in India for professional services rendered in
his individual capacity |
100 |
| 3. 100 per cent Export Oriented Unit/s, Unit/s in
EPZs/STPs/EHTPs |
70 |
| 4. Any other person resident in India |
50 |
(In above Table in item 2 for figure "70", the figure "100" shall be
substituted vide Notification No. FEMA 92/2003-RB, Dt. 07/06/2003)
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.
Explanation : For the purpose of category (2) in column 1,
"professional" shall mean:
- Director on Board of overseas company
- Scientist /Professor in Indian University/Institution
- Economist
- Lawyer
- Doctor
- Architect
- Engineer
- Artist
- Cost/Chartered Account
- Any other person rendering professional services in his individual
capacity, as may be specified by the Reserve Bank from time to time"
(Paragraph (1) has been substitued vide Notification No. FEMA 69/2002-RB, Dt.
26/08/2002)
"Pre-Revised
(1) An entity or a person specified in column 1 of the Table below may credit to
the EEFC Account an amount up to the limit specified in column 2 thereof from
out of the foreign exchange earnings specified in sub-paragraph (1A), namely:
TABLE |
| Entity or person |
Limit (per cent) |
| 1. A Status Holder Exporter (as defined in EXIM Policy in force) |
100 |
| 2. 100 per cent Export Oriented Unit/a Unit in Export Processing
Zone/Software Technology Park/Electronic Hardware Technology Park |
70 |
| 3. Any other person resident in India |
50 |
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."
(Above paragraph (1) has been substituted vide FEMA Notification No. 58/2002-RB,
Dt. 01/04/2002)
- 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-
(Please see Circular No. 26/2002, Dt. 1/3/2002)
(The above paragraph (1) amended by Notification No. 30/2000-RB,
dated 17/11/2000)
"Pre-Revised
- 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 35 per cent, and any other person resident in India
may credit up to 25 per cent of the following, to the EEFC Account, namely-"
(Above paragraph (1) amended by No. 27/2000-RB, dated 14/08/2000)
(1A) Following foreign exchange earnings are specified for the purpose of
sub-paragraph (1), namely:
(Above (1A) has been inserted vide FEMA Notification No. 58/2002-RB, Dt.
01/04/2002)
- 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 loan raised or investment received from
outside India or those received for meeting specific obligations by the
account holder.
(Pl. refer A.P.(DIR Series) Circular . No. 11/2002, Dt. 14/08/2002 for
Exchange Earners’ Foreign Currency (EEFC) Account Scheme)
(Above (i) has been substituted vide Fema Notification No. 51/2002-RB, Dt.
27/02/2002)
"Pre-Revised
i. 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 loan 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; and also payments received
in foreign exchange by a unit in Domestic Tariff Area for supply of goods to
a unit in Special Economic Zone (SEZ).
(In above clause (ii) bold words has been added vide Notification .No. FEMA
77/2002-RB, Dt. 25/11/2002)
- payment received by an exporter from an account maintained with an authorised dealer for the purpose of counter trade, in accordance with the
approval granted in terms of Regulation 14 of the Foreign Exchange
Management (Export of Goods and Services) Regulations, 2000;
- advance remittance received by an exporter towards export of goods or
services;
- Deleted.
(Above (v) has been Deleted vide FEMA Notification No. 58/2002-RB, Dt.
01/04/2002)
"Pre-Revised (v) payment received for export of 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 authorised dealer in India;"
- professional earnings including director's fees, consultancy fees,
lecture fees, honorarium and similar other earnings received by a
professional by rendering services in his individual capacity.
(Clause (vi) has been added vide Notification No. FEMA 69/2002-RB, Dt.
26/08/2002)
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.
(2) Except to the extent provided in sub-paragraph (1), no payment received
in foreign exchange by the accountholder from any other person resident in
India, shall be credited to an EEFC account.
Explanation: For the purpose of the sub-paragraph (1), 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 (1);
- Interest earned on the funds held in the account;
- Recredit of unutilised foreign currency earlier withdrawn from the
account;
- Amount representing repayment by the account holder’s importer
customer, of loan/advances granted in terms of clause (iv) of Paragraph 3.
- representing the disinvestment proceeds received by the resident
account-holder on conversion of shares held by him to ADRs / GDRs under the
Sponsored ADR / GDR Scheme approved by the Foreign Investment Board of
Government of India.
(Above Clause (v) has been added vide Notification No. FEMA 90/2003-RB, Dt.
23/05/2003)
- 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, 2000 and towards a capital account transaction
permissible under the Foreign Exchange Management (Permissible Capital
Account Transactions) Regulations, 2000.
- 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, "Removed- 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, 2000.
(In above sub-para (iv) the words "not exceeding US $ 3 million" has been
deleted vide Notification No. FEMA 113/2004-RB, Dt. 06/03/2004).
- Payment in foreign exchange to a person resident in India for supply of
goods/services including payments for air fare and hotel expenditure.
- Miscellaneous :-
- 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.
- Authorised 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 honouring the cheques that the
payment made by the account holder by issue of a cheque is permissible under
these Regulations.
- DELETED
"Pre-Revised
5. Special provisions for EEFC Account of a unit in a Special Economic Zone
- Save as otherwise provided in this paragraph, nothing contained in
paragraphs 1 to 4 of this Schedule, 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 up to 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 3 and 4 shall mutatis mutandis apply to the EEFC Account of
such unit." -"
6A. Foreign Currency Account of a unit in a Special Economic Zone
A unit located in a Special Economic Zone may open hold and maintain a
Foreign Currency Account with an authorized dealer in India provided that,
- all foreign exchange funds received by the unit in the Special Economic
Zone (SEZ) are credited to such account,
- no foreign exchange purchased in India against rupees shall be credited
to the account without prior permission from the Reserve Bank,
- the funds held in the account shall be used for bonafide trade
transactions of the unit in the SEZ with the person resident in India or
otherwise,
- the balances in the accounts shall be exempt from the restrictions
imposed under Rule 5, except item 3 and 4 of the Schedule III, of the
Government of India Notification No.GSR.381(E) dated May 3, 2000.
Provided further that the funds held in these accounts shall not be lent or
made available in any manner to any person or entity resident in India not
being a unit in Special Economic Zones.
(Above 6A has been inserted & 5 Deleted vide Notification No. FEMA
63/2002-RB, Dt. 21/06/2002)
(Pl. refer A.P. (DIR Series) Circular. No. 54/2002-RB, Dt. 29/06/2002 for
terms and conditions related to - Normal business operations of the office
(trading/non-trading)/branch or representative outside India)
(Above para (5) has been added vide Notification No. 37/2001-RB dated
27/02/2001)