Can I keep USD in India instead of converting it to rupees?

A UX designer billing a US client every month, or an agency that also pays overseas freelancers in dollars, may not want every receipt converted to rupees on arrival. Indian foreign exchange law allows that, through one specific kind of account.

Which account lets you hold foreign currency in India?

The Exchange Earners' Foreign Currency (EEFC) account is the account Indian law provides for holding export earnings in foreign currency. A resident opens it with an authorised dealer (AD) bank under regulation 4(A) and Schedule I of the FEMA (Foreign Currency Accounts by a person resident in India) Regulations, 2015, and can credit up to 100% of eligible foreign exchange earnings to it.² RBI's FAQ lists permitted credits that include inward remittances through normal banking channels, advance remittances received by an exporter, and professional earnings such as consultancy fees.¹

What can you do with the dollars?

You can spend from an EEFC account abroad or convert to rupees later. RBI's FAQ lists these among the permitted debits and features:¹

• Payments outside India for permissible current account transactions, such as paying a foreign subcontractor.
• Payments in foreign exchange to a person resident in India for goods or services.
• Rupee withdrawals at any time, without restriction.
• A cheque facility.

Once converted to rupees, the money cannot be converted back and re-credited.¹

What are the catches?

The EEFC account has three practical limits. It is a current account that pays no interest.¹ RBI's FAQ (updated as on 5 July 2016) says a calendar month's accruals should be converted to rupees by the last day of the following month, after adjusting for approved uses and forward commitments, and adds that FEMA notifications and Master Directions prevail over the FAQ.¹ Ask your bank how it applies that condition today. And holding dollars leaves you exposed to the exchange rate until you convert; see currency risk management.

Does a payment platform let you hold USD?

It depends on the platform. Some convert every receipt to rupees and pay your Indian account automatically; others can credit foreign currency to a bank account. Check the platform's own India help pages for whether it can pay into an EEFC account before you rely on it.

For the full rules and how an EEFC account compares with receiving in rupees, see what is an EEFC account and EEFC account benefits. Bank charges and account requirements vary, so confirm them with your bank.