RBI eases banking and document handling procedures for exporters

The Reserve Bank of India announced measures to ease procedures for exporters at a time when exports are finding it difficult to recover.

One of these measures is that banks will be able to regularise exports where the proceeds have been realised. Currently, banks do so in case of exports up to $1 million, above which regularisation has to be done by RBI in case documents are directly shipped by exporters to the buyers.

Explaining the move, exporters body FIEO director general and CEO Ajay Sahai said during Covid times, many exporters have directly shipped documents to the buyers. Status holder exporters are allowed to send documents directly to buyers but others are allowed only in the case of advance payments because RBI feels that small exporters are not equipped to handle documents and should route them through banks.

In Covid times, courier services were a big challenge. So many exporters have telegraphically sent the documents and exporters have made the payment. SO, it makes a sense that when the country has received the payment, banks should regularise it.

“It is a pragmatic move (on the part) of the RBI,” he said.

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Secondly, RBI has now allowed banks to write off export bills without any limits in case overseas importers are declared insolvent or goods have been destroyed by customs and other authorities abroad etc. Sahai said the write off facility is currently available to the extent of 5 per cent of export value for normal exporters and 10 per cent in case of status holders. Beyond that, cases have to be sent to RBI for approval.

RBI also permitted banks to allow groups to set off their receivables with money to be paid to the same importers. An exporter said this was available to companies currently, but has been extended to groups now.

The central banks also allowed banks to consider refund requests without insisting on import of goods, which are perishable in nature or had been auctioned, destroyed by the authorities concerned subject to production of documentary evidence.

Sahai said,”These are very pragmatic initiatives that RBI has taken, responding to the concerns that exporters have

raised from time to time. This would help in reducing transaction time of exporters. These would definitely make life of exporters easier.”

Exports have been declining since March, with September being the exception. However, october exports contracted by almost the same five percentage points at which they rose in September. November proved worse with a nine per cent drop.

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