Can Exporter Retain EEFC A/c Balance for Buyers Credit Repayment

Trigger for this topic is a question that a reader asked:

“Can Exporter retain dollar in EEFC A/c for buyers credit repayment ?”

Below article gives basic details about EEFC account and revert to above query.

What is EEFC Account ?

Exchange Earners’ Foreign Currency Account (EEFC) is an account maintained in foreign currency with  a bank dealing in foreign exchange.

Features of EEFC Account

  • A person resident of India may open EEFC Account
  • Non-Interest bearing current account
  • No credit facilities, either fund based or non fund based is allowed against security of balance held in EEFC account
  • Foreign Exchange Earners (like exporters) are allowed to credit 100% of their foreign exchange in EEFC Account
  • All accrual in the account during a month should be converted into Rupees on or before the last day of the next month after adjusting for utilization of the balances for approved purposes or forward commitments. 

Note: Other features and details can be found in below reference circulars

Revert on the Query:

RBI made changes in EEFC Account Retention Policy on May 2012 and July 2012. As per revised guidelines, all amount in EEFC Account to be converted next month after adjusting balances for approved purposes or forward commitments. 

Circulars does not specify approved purposes and forward commitments. Thus it is left on interpretation.

Buyers credit is taken towards import payment for tenure upto 360 days for raw material import and 3 years for capital goods import. Repayment of buyers credit:

  • Does not becomes due in the same month in which export proceeds are received.
  • Multiple export proceeds are required for equivalent amount required for Buyers credit repayment and other such reason.

As per interpretation of circular, buyers credit repayment result in forward commitment and thus it should be permissible to maintain equivalent amount in EEFC for more than one month.

A clarification was sort from RBI on the above query, on which RBI gave the below  revert. Copy of RBI letter is attached in reference section for benefit of the readers.

We confirm that the remittance in EEFC account for repayment of the buyers’ credit at a future date may be retained provided the said buyers’ credit commitment is already in place.

Thus exporters / foreign currency earner who are also importers can retain balance in EEFC account for tenure more than 1 month towards future buyers credit payments.


  1. RBI Master Direction –  Import of Goods and Services
  2. Exchange Earner’s Foreign Currency (EEFC) Account: FAQ
  3. RBI Circular: Exchange Earner’s Foreign Currency (EEFC) Account, Diamond Dollar Account (DDA) & Resident Foreign Currency (RFC) Account – Review of Guidelines : Dated: 31 July 2012
  4. RBI Clarification Letter copy (Note: Company has been blanked out to keep customer confidentiality. Given clarification applies to all such cases)

One thought on “Can Exporter Retain EEFC A/c Balance for Buyers Credit Repayment”

  1. there was some confusion about eefc a/c for units in SEZ. earlier they were allowed to have a special account in foreign currency ( interest bearing ) .. now they can’t.. Is there any other condition/facility exist for units in sez to have eefc or any other foreign currency account in india.

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