Exchange Control Regulations, RBI under power delegated under FEMA 1999, receipt and payment of foreign exchange.
Imports & Exports Trade control regulations – DGFT – regulate under EXIM policy, control.
Ads has to ensure compliances.
Export – Import Code Number : -
DGFT, IEC Number, Registration Number for international Trade.
Export Declaration Forms : -
All exports of goods from India to be declared in the prescribed forms to the effect that full value of exports will be realized within the prescribed period & prescribed manner.
GR Forms - ( Electronic Data Exchange, SDF – Statutory Declaration Form )
SOFTX Forms- Software non – physical form
Trade Samples, personal effect of travellers, software ( Rs. 25000/- ), gifts, goods sent out for testing, repairs etc.
Prescribed Time Limits : -
For submission of Exports Documents : -
Export documents along with the copy of GR / PP / SDF form within 21 days from the date of shipment to an AD.
ii) For realization of Export Bills : -
- Maximum time prescribed by RBI is six months.
Status holder Exports like Trading house, export house permitted within 12 months.
Extension ( ETX form )
Overdue Bills ( XOS ) half yearly reported to RBI through AD.
Prescribed Method of Payment : -
Payment for export proceeds should be received through the medium of AD.
Bank Draft, pay order
Foreign currency Notes, travellers cheques from the buyer.
FCNR, NRE a/c, International Credit Cards etc.
Facilities / Remittances Connected with Exports : -
Reduction in invoice value.
Claim against exports.
Refund of export proceeds
Foreign Currency Accounts : -
Overseas Foreign Currency A/C –
RBI permission required. - To enable, payment of goods imported. – To avoid the exchange fluctuations, operating cost and time.
Diamond Dollar Account
EEFC A/C –
50% of the inward payment received in foreign currency can be credited to this A / C
Extension of Time limit : -
ETX to AD – Extensions for reasons beyond the control. ( six months )
AD can permit provided volume of the invoice does not exceed US$ 100,000.
Beyond 12 months for additional 3 months AD can permit.
RBI permission in all other cases for prior approval.
Effective Date of Realization :
Date of credit in the banks Nostro account in case of foreign currency bills & in case of Rupee bills the effective date of realization is the date of debit in the ‘Vostro accounts’.
Crystallization of overdue Bills. Export Credit in Foreign Currency. Running Account Facility.
Crystallization of overdue Bills :-
Sight Normal Transit Period ( NTP )
Usuance Notional Due Date ( NDD )
In case of non – realization of export bill by the given due date, the foreign currency liability of the exporter would continue, till the bill is realised or the liability is converted into the home currency i.e. Indian Rupees & the liability is fixed for the exporter.
As such to restrict the period of this uncertain liability , FEDAI rules provide for Crystallization or conversion of Exporters foreign exchange liability to Rupee liability on the 30 th day from expiry.
Conversion on preventing TT selling rate.
Exchange loss / gain.
Export Credit in Foreign Currency
Pre-shipment Credit in Foreign Currency ( PCFC ) : -
with a view to make credit available to exporters at internationally competitive interest rate.
PCFC can be allowed to exporter in foreign currency as being allowed in INR, US$, pound, sterling, Euro, Yen.
The spread for pre-shipment credit in foreign currency is related to international ref rate such as LIBOR, EURO LIBOR + 125 BP.
The amount of PCFC allowed can be utilized for domestic inputs or for imports.
In case of domestic inputs the foreign currency loan is converted into rupees while in other case the import amount is disbursed directly to overseas supplier by remittances.
PCFC is to be liquidated by discounting / re discounting the foreign currency bill under EBR scheme. ( Export Bill Re- discounted )
Running Account Facility : -
Pre-shipment Credit to exporters is normally provided on lodgment of L / Cs or firm orders.
Banks have been authorized to extend preshipment credit – Running account in respect of any commodity without insisting on L / C or order. Depending on banks judgment on the need for facility :-
Availability of raw material (seasonal).
More time required for manufacture and shipment to meet delivery schedule.
Exporter to keep the export product ready in anticipation of receiving L / Cs or orders.
Running account facility to
Exporters track record is good
In all cases the LCs and orders should be produced by the exporters within a reasonable time.
Bank should mark off the proceeds of export bill against earliest outstanding packing credit loan on FIFO basis ( First in first out )
Exporter found to be abusing the facility, the facility should be withdrawn.
In case exporters have not complied with terms and conditions, the advance will attract commercial funding rate.