What Is an EEFC Account?

Most export payments arrive in dollars, euros or pounds and are converted to rupees by the bank. An EEFC account lets you keep the foreign currency instead. You can pay permitted foreign currency expenses from it, such as software subscriptions abroad, without converting twice. RBI's rules say the credits received in a month, after permitted uses, must be converted to rupees by the last day of the following month. The account is a holding tool for a short window, so it helps with timing and with avoiding extra conversions. It does not change the rules on realising export proceeds. Ask your AD bank which currencies it offers and what it charges.

For example, a freelance designer receives USD 2,000 in March into an EEFC account and pays a USD 300 design tool subscription from it. The remaining USD 1,700 can be converted at a time chosen on or before 30 April. These figures are hypothetical.

• Bank compliance: The account operates under para 3.1 of RBI's Master Direction on Deposits and Accounts. Credits, permitted uses and the conversion timeline are set there, so follow your AD bank's instructions.
• Foreign exchange cost: Keeping money in foreign currency avoids a conversion on amounts you spend abroad. For the rest, you pick the conversion time within the permitted window, which lets you compare rates.
• Realisation: Export proceeds still need to be realised within the period in Regulation 5 of the Export and Import Regulations, 2026. Ask your AD bank how EEFC credits are recorded for that purpose.
• Income tax and GST: Converting later does not change the taxable event on an invoice. Ask your tax adviser how to book exchange gains or losses on balances you hold.

An EEFC account works by receiving eligible foreign exchange earnings in their original currency, allowing permitted payments, and requiring remaining monthly credits to be converted to rupees by the end of the next month.

1. You open an EEFC account with an AD Category-I bank in the currency you are paid in.
2. The client sends the payment, quoting your EEFC account details as the beneficiary.
3. The bank credits the foreign currency, provided it is an eligible foreign exchange earning received through normal banking channels, as set out in para 3.1(1).
4. You use the balance for permitted payments, such as current or capital account transactions outside India under para 3.1(2).
5. You convert the balance left from the month's credits to rupees by the last day of the next month, under para 3.1(6).
6. Rupees withdrawn from the account cannot be credited back to it.

You use an EEFC account by opening it with your AD bank, giving clients its details, paying permitted foreign currency expenses from it and converting the rest on time. Confirm the bank's process before you start.

1. Ask your AD Category-I bank whether it offers EEFC accounts in your currency and what it charges.
2. Check that you are a foreign exchange earner resident in India, which the RBI EEFC FAQ describes as eligible.
3. Submit the bank's account opening forms and KYC documents.
4. Share the account details with your client for the next invoice.
5. Track credits by month and note the conversion date for each month's balance.
6. Convert any unused balance on time, and keep the bank's advice for your records.

• Any foreign money: Not every receipt can be credited. Para 3.1 limits credits to listed foreign exchange earnings, so ask your bank about loans or other receipts.
• Hold indefinitely: The monthly conversion rule means balances cannot be held without limit once the window ends.
• Same as a foreign account: An EEFC account is held with an AD bank in India. It is not an account with a bank abroad.
• Rupee withdrawals reversible: Rupees withdrawn from an EEFC account cannot be re-credited to it.

• AD bank: The bank authorised to deal in foreign exchange, where an EEFC account is held.
• Forward contract: An agreement to convert at a fixed rate on a future date.
• Currency hedging: Ways to limit exchange rate risk on future receipts.
• Export realisation: The receipt of export value in India within the permitted period.
• FIRA: A bank advice confirming a foreign payment was credited.

Every rule and definition on this page is linked to its official source, checked on the dates below.

1. RBI Master Direction - Deposits and Accounts (updated as on 2 September 2026), Para 3.1 (EEFC account), sub-paras (1), (2) and (6) (checked 9 Oct 2026)
2. RBI FAQs: Exchange Earners Foreign Currency (EEFC) Account, Eligibility and purpose (checked 9 Oct 2026)
3. Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, Notification FEMA 23(R)/2026-RB, amended up to 22 September 2026, Regulation 5(1) (checked 9 Oct 2026)