Ref No. : ES/ 64/2017-18 June 01, 2017
Sub : Meeting with the Commerce Secretary
Dear Sir,
1. Caution Listing of Exporters by RBI for non-closure of Export Realization
As you are aware, the EDPMS (Export Data Processing and Monitoring system) system was launched by RBI in March 2014 to monitor payments against Export Bill, and all banks were required to report in this system by submitting details of the export proceeds realization pertaining to the shipping bills. As most of the bank / authorized dealers did not pay attention to the EDPMS work flow, there has been considerable mismatch in the actual exports and exports realization being shown on the EDPMS. Consequently, RBI started issuing caution list of exporters for non-closure for export realization, even through full export proceeds have been received.
The Commerce Secretary has now directed the following –
IEC __________________
Name of the Company ___________________
(for Council’s purpose)
Shipping Bill No. __________________
Shipping Bill Date __________________
Port Code __________________
Name of the Bank __________________
Branch Name __________________
Buyer's Country __________________
Invoice No. __________________
Invoice Value __________________
Realization Value __________________
Outstanding in US$ __________________
Remarks __________________
RBI has informed and instructed the following –
2. Dispensing with requirement of Shipping Bill for negotiation of Export Documents
As per instructions issued by RBI, an exporter is required to submit shipping documents to bank for negotiation. While the detailed shipping documents are not mentioned, as per practice, the shipping bill was all along being submitted to bankers for negotiation. However, the customs have decided to dispense with the hard copy of the shipping bill for EDI shipments. With the result, hard copy of shipping bill is not being issued, but bankers are insisting for the same.
RBI has informed the following –
Customs has informed the following –
3. Third Party/Third Country payments for Exports
Most of our exporters are facing problem of realization from a third party or a third country. In few cases, where the exporters are aware that the payments will come from a third party or a third country, the same is mentioned by them in the shipping documents. However, in large number of cases, exporter himself is not aware about the third party and hence, not in position to declare it at the time of shipment. Many of the exporters exporting to Africa get the payment from Dubai/Singapore. Similarly, large departmental stores, takes supply in various countries and make payment from one office in Singapore, Hong Kong, London, etc.
In such cases, exporters are willing to provide such details at the time of realization, clearly providing the trail of money and relationship between remitter and the buyer. RBI was requested to look into such cases, as their numbers are increasing and will increase the liquidity crunch in the global market.
RBI has informed the following –
The Commerce Secretary has suggested the following –
4. Banks refusal to handle documents for Transit Shipments through Iran
During the meeting it was informed that the Government of India was keen to push the new INSTC (International North–South Transport Corridor) route for exports to Central Asian countries. It was further informed that, whenever any exports consignment is transited through Iran, Indian banks are not willing to issue BRC in such cases, though the goods are destined to Afghanistan, Russia or Central Asia.
The Commerce Secretary & RBI took note of the following and suggested as under –
5. Non-handling of export documents by Indian banks with regard to Sudan and other OFAC
Sanctioned countries
It was informed that some of the Indian banks are not handling the export documents with regard to Sudan and other OFAC (Office of Foreign Assets Control) sanctioned countries. You may be aware that OFAC is the department of the U.S.Treasury that enforces economic and trade sanctions against countries and groups of individuals involved in terrorism, narcotics and other disreputable activities.
Basically, through these sanctions and trade policies, the OFAC tries to pressure a country to conform to certain laws or regulations, or to discontinue disreputable activity.
Banks in India have quoted OFAC regulation of the US as a reason for the same. Though RBI has not issued any instructions to bank for not handling export documents pertaining to Sudan, the exporters to Sudan are unable to receive payment for export made by them. Some of them have been caution listed by RBI as Indian banks are not issuing eBRC for the same.
The Commerce Secretary & RBI took note of the following and suggested as under –
6. Capitalization should be equated at par with Export Realization and consequent benefits
RBI allows capitalizing the payments from Wholly Owned Subsidiary (WOS) towards the exports made, provided such bills are not overdue beyond the prescribed time, the detailed procedure for the same is not clear to banks. Bankers are also not aware how to settle the realization in such cases to issue eBRC. A provision may also be made in the Foreign Trade Policy to provide exports benefit where exports bill are settled through capitalization.
RBI informed the following –
This is for your information.
Thanking You,
V.ANIL KUMAR
EXECUTIVE DIRECTOR