In a statement issued here today, the central bank said that that there has been no proposal of scrapping the scheme, but "the various features of the scheme were currently under review".

The RBI pointed to an earlier statement by its deputy governor, Jagdish Capoor, that some exporters had expressed a need for continuation of the scheme. The EEFC scheme allows exporters to keep a part of their proceeds from export sales in foreign currency-denominated accounts.

Dealers and analysts said the latest central bank statements will put pressure on the rupee on Tuesday when trading resumes after a national holiday on October 2.

Dealers hoped dollar supplies of $1 billion to $1.5 billion from scrapping the scheme would be available. The rupee closed Friday firmer at 46.03/04 compared to its previous close of 46.095/105 per dollar.

"I see the rupee weakening to 46.20 on Tuesday and the pressure on the rupee to ease further will rise further on these statements. I feel the facility should have been dropped as this is being exploited by a few exporters," J. Moses Harding, country treasurer of Centurion Bank, said.

The rupee has already weakened nearly six percent since January.Last month, the RBI, in a bid to support the rupee, instructed exporters to reduce balances held in EEFC accounts by 50 per cent of the amount outstanding on August 11. It also said it would permit future accretions only up to 50 percent of the present amounts eligible and these additions would have to be maintained in current or savings accounts.

The move netted inflows worth $850 million, which helped beef up forex reserves - already down nearly eight percent from their mid-April peak of $38.34 billion.

Dealers said persistent protests led mainly by Indian software exporters might have prompted the central bank to retain the scheme.Software, one of India's aggressively growing sectors, accounted for exports worth $4 billion in 1999/2000 (April-March) and is expected to reach $6.3 billion in 2000/01.

Last month, the National Association of Software and Services Companies (NASSCOM) had protested the central bank's move to reduce exporters' foreign currency holdings.