Mumbai, May, 17: The Reserve Bank of India (RBI), the sole regulator of foreign exchange for the country, has clarified that the conversion of the EEFC balances into rupee balances will only be applicable to available balances in the EEFC account which may be arrived at by netting off earmarked amounts on account of outstanding forward / option contracts booked before May 10, 2012.
On May, 10 2012 RBI has asked all exporters to convert 50 % of the balances in the EEFC accounts in dollar to the rupee accounts for control the rupee to slide further against the dollar. Since then, the authorized dealer banks have raised several quarries regarding it. Therefore, central bank of country has clarified further.
Earlier, all foreign exchange earners were permitted to retain 100% of their forex earnings in EEFC account with any authorized dealer category - I (AD Category - I) banks in India.
As the rupee slides despite the RBI intervention it has decided to ensure the supply of dollar in the process it ask all AD – banks to convert 50% of the balances in the EEFC accounts into rupee balances and credited to the rupee accounts as per the directions of the account holder.
It also asked them to ensure that the process would be completed within a fortnight from the date of the circular and compliance reported to the Chief General Manager, Foreign Exchange Department, Central Office, Trade Division, Amar Building, Sir P.M. Road, Fort, Mumbai 400 001.
According to extent guidelines, in respect of all future forex earnings, an exchange earner is eligible to retain 50% (as against the previous limit of 100%) in non-interest bearing EEFC accounts. The balance 50% shall be surrendered for conversion to rupee balances.