Summary of this article
Ujjivan SFB's EEFC account is for exporters, freelancers, travellers, SMEs, and other entities.
Accountholder can hold foreign currency without immediate rupee conversion.
Non-interest current account unlike interest-bearing RFC, NRE accounts.
Ujjivan Small Finance Bank (SFB) has launched a foreign exchange bank account to make foreign currency remittances and transactions easier. The account, called Exchange Earner Foreign Currency (EEFC) Account, is for resident Indians who earn income in foreign currencies, such as exporters, freelancers, etc., and entities including small and medium enterprises (SMEs), which need to frequently transact in foreign currencies. Account holders can use this EEFC account to receive or pay money in different foreign currencies for business-related purposes or for travel.
EEFC Account
An EEFC account works like a current account. Account holders can keep money in various currencies without the need to immediately convert it into rupees, as per the Foreign Exchange Management Act (FEMA) regulations.
Account holders can avail of the services through the bank’s digital platform or by visiting the branch, which has dedicated staff to help with foreign currency-related products and services, per CNBCTV18 report.
How Is EEFC Different From RFC And NRE Accounts?
Note that one can keep foreign currency in the Resident Foreign Currency (RFC) account, non-resident external (NRE) as well, but there are some basic differences between an EEFC, RFC, and NRE account.
While EEFC is a non-interest-bearing current account, RFC offers interest to the depositors. The purpose of opening these accounts is also different. EEFC is useful for those who frequently receive money or make payments in foreign currency, whereas RFC is used to keep foreign currencies generally by people who have lived abroad, had NRI status, and recently returned to India and want to keep foreign currency from their overseas income or assets.
Besides, RFC is only for individuals, whereas EEFC can be opened by companies and other entities, as well. RFC account remains in foreign currency without the need for mandatory conversion, whereas for EEFC accounts, it needs to be converted into rupees after a certain period.
“100 per cent foreign exchange earnings can be credited to the EEFC account subject to the condition that the sum total of the accruals in the account during a calendar month should be converted into Rupees on or before the last day of the succeeding calendar month after adjusting for utilisation of the balances for approved purposes or forward commitments,” reads RBI FAQs.
Similarly, a NRE account is also only for individuals (non-resident Indians), and it earns interest, unlike the EEFC account, which is only for resident individuals, companies, partnerships, and other entities operating within India. EEFC doesn’t offer interest.
With the EEFC account, Ujjivan Small Finance Bank offers international banking services suitable for those doing multiple transactions in different currencies.
