EEFC Account Circular Not Applicable to RFC Accounts
Current · Source: Reserve Bank of India · RBI/2012-13/135 · issued 18 Jul 2012 · ~1 min read
Quick answerRBI clarifies that the May 10, 2012 circular on Exchange Earner's Foreign Currency (EEFC) accounts does not apply to Resident Foreign Currency (RFC) accounts. AD Category-I banks must inform customers.
The rule, in the simplest words
The rule from May 10, 2012 about EEFC accounts (special accounts for people who earn foreign money) does NOT apply to RFC accounts (special accounts for people who already have foreign money from living abroad).
Banks must tell their customers that the EEFC rule does not affect RFC accounts.
RFC accounts keep working under their own old rules, not the new EEFC rules.
How it plays out — a real example
A forex & trade-finance officer in Indore has a customer with an RFC account who was worried after hearing about new EEFC rules. The officer smiles and explains, 'Don't worry, that EEFC circular from May 2012 doesn't apply to your RFC account. Your account stays the same as before.' The customer feels relieved and thanks the officer for the clear guidance.
What changed
RBI reviewed its earlier circular (A.P. DIR Series Circular No. 124 dated May 10, 2012) regarding EEFC accounts. It now explicitly states that the provisions of that circular will not apply to Resident Foreign Currency (RFC) accounts.
What it means for you
Banks and their customers holding RFC accounts are not affected by the EEFC-related changes from the May 2012 circular. This provides clarity and avoids confusion between the two account types. AD Category-I banks must update their internal guidelines and communicate this to relevant constituents.
What you must do
Inform all constituents and customers about the non-applicability of the May 10, 2012 circular to RFC accounts.
Update internal compliance manuals and training materials to reflect this distinction.
Ensure that RFC account operations continue under existing rules without applying EEFC provisions.
Who it affects
AD Category-I banks, Customers holding Resident Foreign Currency (RFC) accounts, Bank compliance and operations teams
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
Does this circular change any rules for RFC accounts?
No. It only clarifies that the earlier EEFC circular does not apply to RFC accounts, so no new rules are introduced for RFC accounts.
What should banks do with this circular?
Banks must bring the contents to the notice of their constituents and customers, especially those with RFC accounts, to ensure correct application of regulations.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
RBI’s words: “in terms of A.P. (DIR Series) Circular No. 8 dated July 18, 2012 , the RFC accounts were subsequently taken out”
📜 Read the original circular — full text as issued by RBI
RBI/2012-13/135
A. P. (DIR Series) Circular No. 8
July 18, 2012
To
All Authorised Dealer Category- I Banks
Madam/ Sir,
Exchange Earner's Foreign Currency (EEFC) Account
Attention of Authorised Dealer Category - I (AD Category - I) banks is invited to A.P. (DIR Series) Circular No. 124 dated May 10, 2012 .
2. On a review, it is advised that the provisions contained in the aforesaid Circular will not apply to the Resident Foreign Currency Accounts.
3. AD Category - I banks may bring the contents of this circular to the notice of their constituents and customers concerned.
4. The directions contained in this circular have been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.
Yours faithfully,
(Dr. Sujatha Elizabeth Prasad)
Chief General Manager-in-Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2012-13/135 · issued 18 Jul 2012. The plain-English explanation above is BankPulse’s own independent summary.
Ensure that RFC account operations continue under existing rules without applying EEFC provisions.
📜 Compliance
Inform all constituents and customers about the non-applicability of the May 10, 2012 circular to RFC accounts.
Update internal compliance manuals and training materials to reflect this distinction.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are a Compliance officer at a bank this circular applies to (AD Category-I banks, Customers holding Resident Foreign Currency (RFC) accounts, Bank compliance and operations teams), your first concrete step on “EEFC Account Circular Not Applicable to RFC Accounts” is: “Inform all constituents and customers about the non-applicability of the May 10, 2012 circular to RFC accounts.” (RBI issued this 18 Jul 2012).
Circular: RBI/2012-13/135 -- EEFC Account Circular Not Applicable to RFC Accounts
Issued: 18 Jul 2012
Action required: Inform all constituents and customers about the non-applicability of the May 10, 2012 circular to RFC accounts.
Action required: Update internal compliance manuals and training materials to reflect this distinction.
Action required: Ensure that RFC account operations continue under existing rules without applying EEFC provisions.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=7457&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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