EEFC accounts - Clarification received from RBI through FEDAI

This is in continuation with our earlier notification on the circular RBI had issued - Ref. A. P. (DIR Series) Circular No. 12 dated 31st July,2012 relating to revision in guidelines relating to the operation of EEFC accounts. We would like to bring to your attention that Foreign Exchange Dealers' Association of India (FEDAI) has subsequently issued a clarification received from RBI through Ref SPL - 51/EEFC/2012 in relation to the implementation of the above referred circular.

The clarification is reproduced below for your reference:

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Quote:

We advise that the “AD banks can allow non-conversion of any portion of the balance (as at the end of the first month) beyond the last date of the second month subject to such amounts being specifically ear marked before the end of the second month for forward commitments, such as import payments, ECB or FCCB payments, based on supporting documents, for delivery subsequently.”

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Kindly note that in line with the above relaxation, you can now earmark the balance available in your EEFC account against the below transaction / documentation.

Import payments - Based on Commercial Invoice / Request letter cum declaration. Date up to which earmarking would be done would be basis the due date as per Commercial Invoice (or) in case the same is not available in the commercial invoice, based on the date as requested in the request letter

FCCB/ECB payments – Based on customer request letter cum declaration / Form 83 (or) repayment schedule. Date up to which earmarking would be done would be basis the due date as available in the Form 83 / repayment schedule.

The request for ear marking of funds would need to include the below information:

Reference to the forward commitment in terms of import payment / ECB / FCCB payment and confirming the due date of the payment

Undertaking to utilize the earmarked funds for the required transaction by the due date and to ensure strict adherence to RBI guidelines related to EEFC account

Necessary reference to the underlying transaction document