The Reserve Bank of India (RBI) has proposed the rationalisation of norms governing export and import transactions to promote ease of doing business and empower banks to give quicker and more efficient services to foreign exchange customers.
According to draft norms, every exporter should furnish a declaration specifying the amount representing the full export value of the goods or services.
The amount representing the full export value of goods and services shall be realised and repatriated to India within nine months from the date of shipment for goods and the date of invoice for services, RBI said.
The RBI today released the draft regulations under The Foreign Exchange Management Act (FEMA) and directions to authorised dealer banks and sought comments by September 1, 2024.
The draft proposed that the authorised dealer may place an exporter, who has not realised the full value of the export within the time specified, on the caution list. An exporter who has been caution-listed can undertake export only against receipt of advance payment in full or against an irrevocable letter of credit, to the satisfaction of the authorised dealer.
The draft said no advance remittance for the import of gold and silver should be permitted unless specifically approved by the central bank.
Advance payment for the export of goods and services can be received as per the export contract. The rate of interest charged on the advance for export shall not exceed the all-in-cost ceiling of Trade Credit.
RBI draft norms said if the exporter is unable to meet the export obligation as per the terms of the contract, the advance received should be refunded immediately. The authorised dealer could grant an extension of time for the completion of the export obligation.
As for project exports of goods and services on deferred payment terms, RBI proposed that the exporter should submit the proposal for prior approval of the authorised dealer before entering into such an export arrangement. This rule will be applicable for the execution of a turnkey project or a civil construction contract under project exports.
RBI said banks should put in place a comprehensive, well-documented policy approved by its board of directors within six months of the issuance of this circular for handling payment transactions related to the export/import of goods and services.
The policy should ensure that the procedures applied are conducive to international trade and are not discriminatory.
First Published: Jul 02 2024 | 9:00 PM IST
