“Set-off”
of export receivables against import payables
Background:
The Reserve Bank of India (RBI), till
date, has approved “set-off” of export receivables against import payables in
respect of the same overseas buyer and supplier on cash to cash basis.
Amendment:
In a major move at delegating more
powers to banks, the Reserve Bank of India has empowered Authorised Dealer Category-I banks (AD Category-I Banks) to deal
with the cases of “set-off” of export receivables against import payables. This
‘setoff’ required the nod of RBI earlier. The RBI, in its press release, states
that it has been allowing requests from the exporters through their AD Category
1 banks for such “set-off” subject to conditions and it has decided to delegate
such power now.
The RBI, vide A.P. (DIR Series)
Circular No. 47, dated 17 November 2011, has decided to delegate power to
Authorized Dealer (AD) banks to deal with the cases of “set-off” of export
receivables against import payables, subject to the following terms and
conditions:
- Import is as per the Foreign Trade Policy in Force;
- Invoices/ Bills of Lading/ Airway Bills and Exchange Control copies of Bills of Entry for home consumption have been submitted by the importer to the AD bank
- Payment for the import is still outstanding in the books of the importer
- Both the transactions of sale and purchase may be reported separately in ‘R’ Returns
- The relative GR forms will be released by the AD bank only after the entire export proceeds are adjusted/ received
- The ” set-off” of export receivables against import payments should be in respect of the same overseas buyer and supplier and that consent for ”set-off” has been obtained from him
- The export/ import transactions with Asian Clearing Union countries should be kept outside the arrangement
- All the relevant documents are submitted to the concerned AD bank who should comply with all the regulatory requirements relating to the transactions.
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