BANKING AFFAIRS

Detailed explanation-1: -A person resident in India may open, hold and maintain with an authorised dealer in India, a Foreign Currency Account to be known as Exchange Earner‟s Foreign Currency (EEFC) Account. EEFC accounts can be opened, held or maintained only in the form of non-interest bearing current account.

Detailed explanation-2: -What is an EEFC Account and what are its benefits? Ans. Exchange Earners’ Foreign Currency Account (EEFC) is an account maintained in foreign currency with an Authorised Dealer Category-I bank i.e. a bank authorized to deal in foreign exchange.

Detailed explanation-3: -Resident Foreign Currency Account (RFC) The RFC account can be in the form of current or savings or term deposit.

Detailed explanation-4: –(i) There is no restriction on withdrawal in rupees of funds held in an EEFC account. However, the amount withdrawn in rupees shall not be eligible for conversion into foreign currency and for recredit to the account.

Detailed explanation-5: -Explanation: Nostro account refers to an account that a bank holds in a foreign currency in another bank.