Advance Payment against Export Orders under RBI Scan
[RBI
Circular No. 74 dated 9th February 2015]
Sub:
Delay in Utilization of Advance Received for Exports
Attention
of Authorised Dealer Category – I (AD Category – I) banks is invited to the
sub-regulation (1) of Regulation 16 of the Foreign Exchange Management (Export
of Goods and Services) Regulations, 2000, notified vide Notification No. FEMA
23 / RB-2000, dated May 3, 2000, as amended from time to time read with A.P.
(DIR Series) Circular No. 105 dated May 20, 2013, A.P. (DIR Series) Circular
No. 108 dated June 11, 2013 and A.P. (DIR Series) Circular No. 37 dated
November 20, 2014 in terms of which an exporter receiving an advance payment
for exports (with or without interest) from a buyer outside India shall be
under an obligation to ensure that the shipment of goods is made within the
stipulated period from the date of receipt of advance payment.
2. As it has been
observed that there is substantial increase in the number and amount of advances
received for exports remaining outstanding beyond the stipulated period on
account of non-performance of such exports (shipments in case of export of
goods), AD Category –I banks are advised to efficiently follow up with the
concerned exporters in order to ensure that export performance (shipments in
case of export of goods) are completed within the stipulated time period.
3. It is further
reiterated that AD category –I banks should exercise proper due diligence and
ensure compliance with KYC and AML guidelines so that only bonafide
export advances flow into India. Doubtful cases as also instances of chronic defaulters
may be referred to Directorate of Enforcement (DoE) for further investigation.
A quarterly statement indicating details of such cases (as per Annex) may be
forwarded to the concerned Regional Offices of RBI within 21 days from the end
of each quarter.
4. AD Category –
I banks may bring the contents of this circular to the notice of their
constituents and customers concerned.
5. The directions
contained in this circular have been issued under Section 10 (4) and Section 11
(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are
without prejudice to permissions / approvals, if any, required under any other
law.