RBI/2004/246
A.P.(DIR Series) Circular No.96
June 15, 2004
To
All Authorised Dealers in Foreign Exchange
Dear Sirs/Madam,
Exchange Earners' Foreign
Currency (EEFC) Account Scheme - Liberalisation
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.
- 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.
- 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)
Yours faithfully,
Grace Koshie
Chief
General Manager
EEFC
Accounts for Professionals
August
15, 2002
The
Reserve Bank of India has now decided to permit 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 is permitted for the benefit
and convenience of individual professionals, such as, scientists, professors of
Indian universities/institutions, economists, lawyers, doctors, artists, architects,
engineers, consultants, cost/chartered accountants, directors on boards of overseas
companies, etc. This would enable the professionals to use the funds from these
accounts to meet their foreign exchange requirements without any prior approval
of the Reserve Bank.
Currently,
residents in India are permitted to maintain exchange earner’ foreign currency
(EEFC) accounts with banks in India, out of a portion of their earnings in foreign
exchange. Exchange earners’ foreign currency accounts can be opened and maintained
with any branch of a bank dealing in foreign exchange. Cheque facilities are also
available for operations in the EEFC accounts.
The
Reserve Bank has stated that applications from professionals for availing this
facility, may be forwarded by the concerned bank branches to the regional offices
of its exchange control department.
Alpana Killawala
General Manager
Press Release No. 2002-2003/172
EEFC
Account Scheme for EOUs further liberalised
As
a part of continuous process of rationalisation and simplification of procedures
and further liberalisation of the existing regulations relating to exporters,
the Reserve Bank of India has announced rationalisation of the Exchange Earners’
Foreign Currency (EEFC) Account Scheme.
As
a further measure towards giving boost to the export oriented units and rationalisation
of the EEFC Account Scheme, there will now be only two categories of EEFC account
holders. One, those who can retain upto 100% of their receipt in foreign exchange
and others who can retain upto 50% of their receipt in foreign exchange.
Accordingly,
a 100% 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 (EHTP), will now, be eligible to credit upto 100% of their foreign exchange
receipts to their EEFC Account, against the existing eligibility of credit upto
70%. So far, the facility of crediting upto 100% of receipts was available only
to Status Holder Exporters and Professionals who rendered services in their individual
capacity, to entities outside India . As a result of this liberalisation, the
facility of crediting upto 100% of foreign exchange receipts to their EEFC account
will now also be available to Status Holder Exporters, Professionals, 100% EOUs
and units in EPZ/STP/EHTP.
Pending
issue of the notification amending the existing Regulations framed under Foreign
Exchange Management Act, 1999 (FEMA), the Regional Offices of the Reserve Bank
will expeditiously deal with applications received with regard to the change.
Alpana Killawala
General Manager
Press
Release No. 2002-2003/265
Notification
No.FEMA 69/2002-RB August 26,2002
Foreign
Exchange Management(Foreign Currency Account by a Person Resident in India) (Amendment)
Regulations, 2002
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) and in partial modification
of its Notification
No.FEMA 10/2000-RB dated May 3, 2000, Reserve Bank of India makes the following
amendments to Foreign Exchange Management(Foreign Currency Accounts by a Person
Resident in India) Regulations, 2000 namely:
1.
Short title and commencement
- These Regulations may 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.
2.
Amendment to the Regulations
In
the Foreign Exchange Management (Foreign Currency Accounts by a Person Resident
in India) Regulations, 2000 in the Schedule.
- for
paragraph (1), the following paragraph shall be substituted, namely;
3.An entity or a
person specified in column 1 of the Table below may credit to the EEFC Account
an amount upto the limit specified in column 2 thereof from out of the foreign
exchange earnings specified in sub-paragraph(1A) namely;
Entity/person Limit(per cent)
- A Status Holder Exporter(as
defined in EXIM Policy in force) 100
- A
resident in India for professional Services rendered in his individual capacity
100
- 100 per cent Export Oriented Unit/s.
Unit/s in EPZs/STPs/EHTPs 70 - 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.
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
Accountant
- Any
other person rendering professional services in his individual
Capacity,
as may be specified by the Reserve Bank from time to time".
ii.
In sub-paragraph (1A) after clause
(v) , the following clause shall be added, namely:
"(vi)
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"
Sd/-
(K.J.Udeshi)
Executive
Director
G.S.R.755(E)
dated November 8, 2002
Notification
No.FEMA 92/2003-RB dated June 7,2003
Foreign
Exchange Management(Foreign Currency Account by a Person Resident in India) (Fourth
Amendment)Regulations, 2003
In exercise of 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) and in partial modification
of its Notification
No.FEMA 10/2000-RB dated May 3, 2000, Reserve Bank of India makes the following
amendments to Foreign Exchange Management (Foreign Currency Accounts by a Person
Resident in India) Regulations, 2000 namely:
1.
Short title and commencement :-
- 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.
2.
Amendment of the Regulations
In
the Foreign Exchange Management(Foreign Currency Accounts by a Person Resident
in India) Regulations, 2000, in the Schedule; in paragraph 1, in sub-paragraph
(1) in the table, in item 2, for the figure "70", the figure "100"
shall be substituted.
Sd/-
(K.J.Udeshi)
Executive Director
G.S.R.11(E)
dated January 7, 2004