Circular No.ES/313 /2018-19 December 12, 2018
To: Members of the Council
Sub: Meeting with RBI regarding issue of denial of payments received from Third Party/Country from their Authorised Dealer Banks
Dear Member,
We are glad to inform that the Council’s delegation led by Shri Rakesh Mehra, Past Chairman had attended a Meeting with RBI Officials to discuss the difficulty being faced by some of our member-exporters on refusal of their Authorised Dealer Banks to clear their payments received through Third Party/Country with response to our communication with RBI that some of our member-exporters based in Mumbai, Surat and Bhilwara are facing problems and Banks (selective Banks) were not ready to clear/realize their remittance.
The Council informed RBI that reason for making payments by the buyer through a third party is because majority of the African and Middle-East countries have foreign exchange shortages and fluctuations. Sometimes the importers are also financed by agents who pay on the importers behalf and offer credit facilities to the Importer/buyer. On several occasions the buyer pays advances against orders depending on the agreement and balance amount is paid through third party/ country against shipment of the goods i.e. against the copy of bill of lading etc.
During the discussion, RBI Officials informed that the Indian exports should not suffer on account of payments received from Third Party/Country. They further stated that Authorised Dealer Banks can rely on documentary evidence for leading to third party payments rather than insisting on Tri Partite Agreement.
RBI advised to take up the matter with the Regional/Zonal Managers of the concerned Banks and appraise them since this issue was raised by only 3 to 4 banks. Otherwise individual cases may be referred to RBI so that they will take up with concerned banks for redressal.
Later RBI also advised the Council to inform our members to provide their email id to their respective Authorised Dealer Banks with a copy marked to RBI so that their AD banks sends message to individual exporters giving details of their shipping bills outstanding. Therefore, members are requested to act quickly before their Authorised Dealer Banks submits its Export Data Processing and Monitoring System (EDPMS) statement to RBI by Dec 31, 2018.
As you may be aware, an EDPMS statement is a report submitted by the Authorised Dealer Bank to RBI where the export proceeds which are realized and/or extension for realization is granted and the exporter automatically gets de-caution listed. In case their shipping bill is not realized and remains outstanding for a long time, they may please clear it before it is caution listed.
In case you are facing any problem with your Banks regarding the above issue you may bring it to our notice so that we can take it up appropriately with RBI.
Members are requested to make a note of the above and do the needful as soon as possible.
Thanking you,
Yours faithfully,
S. BALARAJU
EXECUTIVE DIRECTOR
