The Hindu Business Line : Exporters to retain 100% earnings in EEFC a/cs

At present, export-oriented units, individual professionals (scientists, economists and lawyers), units in export processing zones, software technology parks and units producing electronic hardware technology parts can retain 100 per cent of their earnings in the EEFC accounts. For the rest, the limit is 50 per cent.

Mr V.P. Shetty, Chairman, IDBI, said that foreign exchange earners will now not be forced to repatriate money to India. "This will help them in handling exchange rate fluctuations," he said.

Aid mid-sized cos

According to bankers, the move would help mid-sized companies in sectors such as jewellery, diamond and textiles. "This will help mid-sized companies engaged in imports and exports. Companies will now be able to make trade related payments from the EEFC account," said Mr P.T. Srinivasa, Vice-President, Trade Finance, Development Credit Bank.

Bankers said small companies with short working capital cycles would now be able to protect themselves against currency risks. This would help companies which do not have aggressive treasuries to efficiently make overseas payments, said a banker.

Remittance limit

Moving towards fuller convertibility, the RBI has enhanced the remittance limit for Indians. They can now remit up to $50,000 per financial year for any current or capital account transaction or both, against the earlier limit of $25,000. The existing facilities for gifts, donations and investment made by Indians in overseas companies will be included under this revised limit.

"While there is unlikely to be a significant impact from the enhancement of the limit on individual outward forex remittances and overseas investment by mutual funds, these measures are suggestive of an accelerated approach to capital account convertibility," said Ms Tarini Vaidya, Country Treasurer, Centurion Bank Of Punjab.