Delay in Utilization of Advance Received for Exports
1. ADs banks is invited to the sub-regulation (1) of Regulation 16 of the Foreign Exchange Management (Export of Goods and Services) Regulations, 2000, 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), ADs 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 ADs 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 may be forwarded to the concerned Regional Offices of RBI within 21 days from the end of each quarter.
(RBI/2014-15/461 A. P. (DIR Series) Circular No.74 Dated 9 Feb, 2015)
Foreign Exchange Management Act, 1999 – Import of Goods into India
Authorised Dealer banks is invited to the A.P.(DIR Series) Circular No. 82 dated February 21, 2012 in terms of which applications by persons, firms and companies for making payments, exceeding USD 5,000 or its equivalent towards imports into India must be made in Form A-1. To further liberalise and simplify the procedure, it has been decided to dispense with the requirement of submitting request in Form A-1 to the ADs Banks for making payments towards imports into India. ADs bank may however, need to obtain all the requisite details from the importers and satisfy itself about the bonafides of the transactions before effecting the remittance.
(RBI/2014-15/467 A. P. (DIR Series) Circular No.76 Dated 12 Feb, 2015
Do You Know?
a. An insurance document, such as an insurance policy, an insurance certificate or a declaration under an open cover, must appear to be issued and signed by an insurance company, an underwriter or their agents or their proxies. Any signature by an agent or proxy must indicate whether the agent or proxy has signed for or on behalf of the insurance company or underwriter.
b. When the insurance document indicates that it has been issued in more than one original, all originals must be presented.
c. Cover notes will not be accepted.
d. An insurance policy is acceptable in lieu of an insurance certificate or a declaration under an open cover.
e. The date of the insurance document must be no later than the date of shipment, unless it appears from the insurance document that the cover is effective from a date not later than the date of shipment.
(Source: UCP 600- Article - 26: Insurance Document and Coverage)
Market Wrap Up
- Indian Rupee depreciated during the week and touched a low of 62.47, in line with most Asian currencies, as they tumbled after the latest US jobs data which helped buoy the greenback. A fall in local stocks that triggered worries about foreign fund outflows also hurt the local currency.
- Suspected dollar purchases by the nation’s central bank and news of uncertainty surrounding Greece’s debt agreement continues to weigh on the currencies and dampened global risk appetite, which kept Indian Rupee under pressure throughout the week before closing at 62.19.
- CPI for January, as measured by a new methodology, has inched up to 5.11 percent, compared to 4.28 percent (also on new methodology) in December. IIP for December stood at 1.7 percent compared to 3.9 percent in previous month.
- India’s trade deficit shrank to $8.32 billion in January, its lowest since February 2014, from $9.43 billion a month earlier.
- Rupee is expected to trade in the range of 61.80-62.60 next week. USD/INR forward premiums are expected to remain in downward trend with upticks likely to be received.
Movement of major currency pair during the week:
OPEN HIGH LOW CLOSE
USD/INR 62.0000 62.4700 61.9250 62.1900
EUR/USD 1.1314 1.1441 1.1269 1.1383
GBP/USD 1.5244 1.5422 1.5195 1.5397