Mumbai, Sept. 6: The Reserve Bank of India (RBI) today announced multiple relaxations in foreign exchange norms when it allowed rationalisation of the Exchange Earners’ Foreign Currency (EEFC) Account Scheme. For residents, it reduced the minimum period of repayment for foreign exchange loans and increased availability of foreign exchange for medical treatment outside India, without insisting on any estimate from a doctor or hospital.
Explaining the further liberalisation of the existing regulations relating to exporters, the RBI announced that henceforth, a 100 per cent export oriented unit (EOU) or a unit situated in Export Processing Zone (EPZ) or Software Technology Park (STP) or Electronic Hardware Technology Park (EHTP), will now, be eligible to credit up to 100 per cent of their foreign exchange receipts to their EEFC account, against the existing eligibility of credit up to 70 per cent.
So far, the facility of crediting up to 100 per cent of receipts was available only to status holder exporters and professionals who rendered services in their individual capacity, to entities outside India .
As a result of this liberalisation, the facility of crediting up to 100 per cent of foreign exchange receipts to their EEFC account will now also be available to status holder exporters, professionals, 100 per cent EOUs and units in EPZ/STP/EHTP.
The central bank also announced that with a view to enabling residents to avail of foreign exchange for medical treatment abroad without any hassles and any loss of time, authorised dealers may release foreign exchange upto $ 50,000, for medical treatment outside India, without insisting on any estimate from a doctor or hospital, on the basis of a declaration of requirement given by the applicant, provided the payment for purchase of such foreign exchange is being made by cheque or by debit to the applicants account.
Under the existing regulations, residents can purchase foreign exchange from authorised dealers in India for medical treatment outside India, on production of an estimate from a doctor or hospital giving the likely expenses involved in the treatment.
In yet another move to simplify existing rules and regulations relating to the foreign exchange transactions by residents in India, the apex bank reduced the minimum period for repayment of foreign currency loans as entitled by Indian residents to one year.
Under the existing regulations, residents have general permission to borrow upto $ 250,000 from their close relatives resident outside India provided the loan is free of interest and is not repayable before seven years.
RBI here said that in view of the representations received by the bank, it has been decided to reduce the minimum period for repayment for such loans to one year.