Updated as of 15th Jun, 2004 

In terms of Regulation No.4, of the Notification No.FEMA 10/2000-RB dated May 3, 2000, 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 Earners’ Foreign Currency (EEFC) Account, subject to the terms and conditions of the Exchange Earners' Foreign Currency (EEFC) Account Scheme specified in the Schedule to the said notification.

1. Subsequently, as a part of continuous process of rationalisation and simplification of procedures and further liberalisation of the existing regulations relating to exports, the Reserve Bank of India issued two Press Releases (copies enclosed) as detailed under to announce rationalisation/liberalisation of EEFC Account Scheme.

1. Press Release : 2002-2003/172 dated August 15, 2002 : The Reserve Bank has permitted individual professionals to keep up to 100 per cent of their foreign exchange earnings from consultancy and other services rendered to persons or bodies outside India, in their foreign exchange earners’ foreign currency (EEFC) account. The facility has been permitted for the benefit and convenience of individual professionals, lawyers, doctors, artists, architects, engineers, consultants, cost/chartered accountants, directors on boards of overseas companies, etc.

2. Press Release : 2002-2003/265 dated September 6, 2002 : As a further measure towards giving boost to the export oriented units and rationalisation of the EEFC Account Scheme, it was decided that there would only be two categories of EEFC Account holders. One, those who can retain upto 100 per cent of their receipt in foreign exchange and others who can retain upto 50 per cent of their receipt in foreign exchange. Accordingly, a 100 per cent Export Oriented Unit (EOU) or a unit situated in (a) Export Processing Zone (EPZ) or (b) Software Technology Park (STP) or (c) Electronic Hardware Technology Park (EFTP), are eligible to credit upto 100 per cent of their foreign exchange receipts to their EEFC Account, against the existing eligibility of credit upto 70 per cent.

2. Pending issue of the notification amending the existing Regulations framed under Foreign Exchange Management Act, 1999, Authorised Dealers were advised to forward the applications in respect of (i) and (ii) above, to the regional offices of the Foreign Exchange Department of the Reserve Bank.

3. Government of India has since notified the above liberalisations, vide Notifications No.FEMA.69/2002-RB dated August 26, 2002 [G.S.R.755(E) dated November 8, 2002] and No.FEMA.92/2002-RB dated June 7, 2003 [G.S.R.11(E) dated January 7, 2004] (copies enclosed). Accordingly, it will be in order for Authorised Dealer to extend the facility of opening, holding and maintaining EEFC Accounts as stated in the notifications, without reference to the Reserve Bank.

4. It is also brought to the notice of the Authorised Dealers that in "Amendment of the Regulations" in Notification No.FEMA.92/2003-RB dated June 7, 2003, item No. has been erroneously stated as "2" instead of "3". Authorised Dealer may, therefore, read the item No. as "3". Necessary corrigendum to effect this change is being issued separately.

5. Authorised Dealers may bring the contents of this circular to the notice of their constituents concerned.

6. The directions contained in this circular have been issued under Sections10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999)

(42 of 1999).