Reserve Bank Of India
A. P. (DIR Series) Circular No. 12
July 31, 2012
To
All Category - I Authorised Dealer Banks
Dear Madam/ Sir,
Exchange Earner's Foreign Currency (EEFC) Account, Diamond Dollar Account (DDA)
& Resident Foreign Currency (RFC) Account - Review of Guidelines
Attention of the Authorised Dealer (AD) Category - I banks is invited to
A.P.
(DIR Series) Circular No.15 dated November 30, 2006 in terms of which all
foreign exchange earners were permitted to retain 100% of their foreign exchange
earnings in EEFC account with any AD in India. Subsequently, in terms of
A.P. (DIR Series) Circular No. 124 dated May 10, 2012, it was stipulated, inter alia,
that in respect of all future foreign exchange earnings, an exchange earner will
be eligible to retain only 50% of her/his export earnings in EEFC accounts and
the balance 50% shall be surrendered for conversion to rupee balances. This
provision was, made applicable, mutatis mutandis, to Diamond Dollar Account and
Resident Foreign Currency (RFC) Account as well. Further, in terms of A.P. (DIR
Series) Circular No. 8 dated July 18, 2012, the RFC accounts were subsequently
taken out of the purview of the provisions of the aforesaid Circular dated May
10, 2012.
- For operational convenience, the regulations have been reviewed. It has now
been decided to restore the erstwhile stipulation of allowing credit of 100%
foreign exchange earnings to the EEFC account subject to the condition that the
sum total of the accruals in the account during a calendar month should be
converted into Rupees on or before the last day of the succeeding calendar month
after adjusting for utilization of the balances for approved purposes or forward
commitments. Accordingly, balances outstanding in an EEFC account as on July 31,
2012 and those balances that would accrue in the account with effect from August
1, 2012 shall get converted to Rupee balances on or before close of business on
September 30, 2012. Similar procedure may be followed for accruals during the
subsequent months.
- The above stipulations would also apply to RFC (Domestic) and Diamond Dollar
accounts.
- All other terms and conditions stipulated in the Circulars referred to above
remain unchanged.
- AD Category - I banks may bring the contents of this circular to the notice
of their constituent and customers concerned.
- The directions contained in this circular have been issued under Sections
10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and
are without prejudice to permissions / approvals, if any, required under any
other law.
Yours faithfully,
(Rashmi Fauzdar)
Chief General Manager
RBI/2012-13/151