Economics · Banking and Foreign Exchange Regulations
Under the regulatory framework provided by the Reserve Bank of India, which of the following statements regarding the operational guidelines of the Exchange Earners' Foreign Currency (EEFC) account is entirely correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Balances in the account can be used for making payments for any capital account transaction outside India up to $10 million per financial year without any RBI approval.
- 2The account is an interest-bearing savings account that allows corporate entities to retain funds indefinitely to hedge against exchange rate volatility.
- 3Only 75% of the export proceeds can be retained in the account while the remaining 25% must be compulsorily liquidated upon receipt.
- 4100% of the foreign exchange earnings can be credited to the account provided it earns no interest and the balance is converted to Rupees by the last day of the following month.✓
Correct answer
100% of the foreign exchange earnings can be credited to the account provided it earns no interest and the balance is converted to Rupees by the last day of the following month.
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