EEFC Account vs Payment Platforms

EEFC Account vs Payment Platforms
Anoosh Kotak22 November 2023

Imagine you have found a great data scientist in Latvia (or any foreign country) to work on your software product. You have found marketing agencies and distributors in different countries to bring it to market. You also use cutting-edge SaaS tools for office collaboration. But you have to pay for all of it in foreign currency. 

Wouldn't it be convenient to earn and spend in dollars and only transfer the net amount into your bank account, eliminating the need to exchange forex twice?

However, such cross-border payments are a fantasy if you want to execute them using a traditional bank account. But if not, bank accounts, what else?

Two of the most convenient and sought-after options are Exchange Earner’s Foreign Currency (EEFC) accounts and cross-border payment platforms such as Stripe or PayPal. But which one should you choose? Let’s explore both options further.

EEFC Account Meaning

Exchange Earner’s Foreign Currency Accounts (EEFCs) are foreign currency accounts in India to retain foreign exchange earnings outside India. These accounts help receive foreign currency payments, which you can use to make further payments outside India. 

The Reserve Bank of India has mandated that residents can open such foreign currency accounts in India as current accounts, which bear on interest benefits. 

EEFC accounts can only be opened by banks that handle foreign exchange. EEFC accounts are available at well-known Indian banks such as ICICI, HDFC, Axis, IndusInd, and DBS.

EEFC Account Eligibility

An individual residing in India can establish and operate an EEFC Account, following the terms and conditions outlined by the RBI, which encompass the FEMA Regulations 2000 and the Foreign Exchange Management Act, 1999, governing the functioning of the EEFC Account.

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