The EEFC account refers to the Exchange Earners Foreign Currency; it is similar in a lot of ways to an ordinary savings bank account. People who are involved in the work of foreign exchange are eligible to open an eefc account. It is meant for those people who have payables and receivables in many different currencies. There has been an increase in the export of Indian goods due to a growth in the fields of biotechnology, software, jewelry and precious stones and textiles. This has also created an increase in the number of inward remittances. The RBI introduced the system of an eefc account to protect those firms involved in exports from fluctuations in the exchange rates. An eefc account help firms involved in the business of import and export by enabling them to deposit foreign currencies into their designated eefc account. An eefc account is a current account that holds foreign currency of authorized foreign exchange dealers and has no interest rate. According to the Foreign Exchange Management Act, only authorized dealers can have an eecf account, if people want to deal in Forex, they will have to go through these authorized dealers.
Top an EEFC account, you will need to fill up and submit the eefc account opening form. If you are an individual or a company that is involved in foreign exchange and resigning in India, you are probably familiar with the eefc account opening form, this form is available online through ww.rbi.org.in, you will have to download the form and submit it. There are many banks who can supply you with an eefc account opening from. You can download the form from their official websites and submit it at their nearest branch. Currently, you can get the eefc account opening form and create an EEFC account at major banks. For each business, mode of operations and accounts, there is a different eefc account opening form; you will need to consider what type of business you have and how you operate before you fill up the respective forms. Along with your eefc account opening form, you will also have to submit documents like copies of your passport, PAN card, Driving licenses, Utility Bills, OCI and PIO cards as proof of identification.
The eefc account permissible debits refer to all those outside payments that come into an Indian permissible current account and the capital account transactions that are permissible. The eefc account permissible debits may also include the payment of goods bought from an Export Oriented Unit using foreign exchange payment transaction methods. These same goods can be bought from an export processing zone, electronic hardware Technology Park and a software technologies park using foreign exchange payment methods. Another type of eefc account permissible debits cover the payment of customs duty on the respective as stated by the Foreign Trade Policy. The next eefc account permissible debits are the payments of outstanding loans or advances related to this trade, loans are generally given by the exporter or eefc account holder to the importer residing outside India. The terms and conditions of the loans granted should be in keeping with the Borrowing and Lending regulations of the Foreign Exchange Management. The final type of eefc account permissible debits is the payment of the person who is responsible for other related services that may include hotel expenditure and airfare, this person should be a resident if India and can be paid in foreign exchange.