The Hindu : RBI eases EEFC account norms for EOUs

Online edition of India's National Newspaper
Saturday, Sep 07, 2002

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RBI eases EEFC account norms for EOUs

By Our Special Correspondent

MUMBAI SEPT. 6. The Reserve Bank of India today liberalised procedures for release of foreign exchange for medical treatment abroad and loans from close relatives outside India. It also further liberalised Exchange Earners' (EEFC) Foreign Currency Account Scheme for export oriented units (EOUs).

"With a view to enabling residents to avail themselves of foreign exchange for medical treatment abroad, it has been now decided that authorised dealers may release foreign exchange up to $50,000 for medical treatment outside India, without insisting on any estimate from a doctor or hospital, on the basis of a declaration of requirement given by the applicant," the RBI stated in a release. On loans from close relatives outside India, the RBI decided to allow up to $250,000, provided the loan is free of interest and is repayable after one year instead of the earlier minimum non-payment seven-year period.

As a further measure towards giving boost to the export oriented units and rationalisation of the EEFC Account Scheme, there will be only two categories of EEFC account holders. One, those who can retain up to 100 per cent of their receipt in foreign exchange and others who can retain up to 50 per cent of their receipt in foreign exchange.

Accordingly, a 100 per cent EOU or a unit situated in export processing zones (EPZs), software technology parks (STPs) and electronic hardware technology parks (EHTPs) will now be eligible to credit up to 100 per cent of their foreign exchange receipts to their EEFC Account against the existing eligibility of credit up to 70 per cent.

So far the facility of crediting up to 100 per cent 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 up to 100 per cent of foreign exchange receipts to their EEFC account will now also be available to status holder exporters, professionals, 100 per cent EOUs and units in EPZs, STPs and EHTPs.

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