Current Account Management When India adopted current account convertibility in 1994, it was recognised, as emphasised by the Rangarajan Committee, that there could be capital outflows in the guise of current account transactions. Hence, certain safeguards were built into the regulations relating to current account transactioins. First, the requirement of repatriation and surrender of export proceeds was continued.
Exporters were, however, allowed to retain a portion of their earnings in foreign currency accounts in India which could be used for approved purposes, thereby avoiding costs of conversion and reconversion. Second, all authorised dealers were allowed to sell foreign exchange for underlying current account transactions which could be readily identified and supported by some documentary evidence.