AD Category I Banks will allow
remittance for making payments for imports into India, only after ensuring that
all the requisite details are made available by the importer and the remittance
is for bona fide trade transactions.
Import Licences
For goods not included in the
negative list Banks may freely open letters of credit and allow remittances for
import.
While opening LC, for goods
included in the negative list the ‘For Exchange Control purposes’ copy of the licence
should be called for and conditionsif any should be adhered to. After effecting remittances banks
may preserve the copies of utilised licence /s till they are verified by the
internal auditors or inspectors.
(i) Any person acquiring
foreign exchange is permitted to use it either for the purpose mentioned in the
declaration made by him or for any other purpose for which acquisition of
foreign exchange is permissible.
(ii) Where foreign exchange
acquired has been utilised for import of goods into India, bank should ensure
that the importer furnishes evidence of import, and satisfy himself that goods
equivalent to the value of remittance have been imported.
(iii) Payment for import can
also be made by way of credit to non-resident account of the overseas exporter
maintained with a bank in India.
Time limit for Normal Imports
(i) Remittances against
imports should be completed not later than six months from the date of
shipment, except in cases where amounts are withheld towards guarantee of
performance, etc.
(ii) Banks may permit
settlement of delayed import dues. However, interest in respect of delayed
payments, usance bills or overdue interest for a period of less than three
years from the date of shipment may be permitted.
Time Limit for Deferred Payment Arrangements
Deferred payment arrangements,
providing for payments beyond a period of six months from date of shipment up
to a period of less than three years, are treated as trade credits.
Time Limit for Import of Books
Remittances against import of books may be allowed
without restriction as to the time limit, provided, interest is paid.
(i) Except as otherwise
provided, no person shall, without the general or special permission of the
Reserve Bank, import or bring into India, any foreign currency.
(ii) Reserve Bank may allow a person to bring into India
currency notes of Government of India and / or of Reserve Bank subject to terms
and conditions that Reserve Bank may stipulate.
Import of Foreign Exchange into India
A person may –
(i) Send into India, without limit, foreign exchange in
any form other than currency notes, bank notes and travellers cheques;
(ii) Bring into India, foreign
exchange without limit, subject to the condition that such person makes, a
declaration in Currency Declaration Form to the Custom Authorities at the
Airport for an amount exceeding USD 10,000(currency notes, bank notes or
travellers cheques) or USD 5000 (cash) or its equivalent.
Import of Indian Currency and Currency Notes
(i) Any resident, may bring into India at the time of his
return (other than from Nepal and Bhutan), currency notes of Government of
India and Reserve Bank of India notes up to an amount not exceeding Rs.25,000
(Rupees twenty five thousand only).
(ii) A person may bring into India from Nepal or Bhutan,
currency notes of Government of India and Reserve Bank of India for any amount
in denominations up to Rs.100/-.
Banks are allowed to make payments to a third party for
import of goods, subject to conditions as under:
- Firm irrevocable purchase order / tripartite
agreement should be in place. However this requirement may not be
insisted upon in case the party has produced
·
Documentary evidence for
circumstances leading to third party payments.
·
Name of the third party being
mentioned in the irrevocable order.
·
Invoice.
- Bank should be satisfied with the bonafides of the
transactions and should consider the Financial Action Task Force (FATF)
Statement before handling the transactions;
- The Invoice should contain a narration that the
related payment has to be made to the third party;
- Bill of Entry should mention the name of the shipper
as also the narration that the related payment has to be made to the third
party;
- Importer should comply with the instructions
relating to imports including those on advance payment being made for
import of goods.
Advance Remittance for Import of Goods
(i) Bank may allow advance
remittance for import of goods without any ceiling subject to the following
conditions:
(a) If the amount of advance
remittance exceeds USD 200,000 or its equivalent, an unconditional, irrevocable
standby Letter of Credit or a guarantee from an international bank of repute
situated outside India or a guarantee of an AD Category – I bank in India, if
such a guarantee is issued against the counter-guarantee of an international bank
of repute situated outside India, is obtained.
(b) In cases where the
importer bank guarantee and the bank is satisfied about the track record and
bonafides of the importer, the requirement of the bank guarantee / standby
Letter of Credit may not be insisted upon for advance remittances up to USD
5,000,000 (US Dollar five million). Banks may frame their own internal
guidelines to deal with such cases as per a suitable policy framed by the
bank's Board of Directors.
(c) A Public Sector Company or
a Department/Undertaking of the Government of India / State Government/s which
is not in a position to obtain a guarantee from an international bank of repute
against an advance payment, is required to obtain a specific waiver for the
bank guarantee from the Ministry of Finance, Government of India before making
advance remittance exceeding USD 100,000.
(ii) All payments towards
advance remittance for imports shall be subject to the specified conditions.
Advance Remittance for Import of Rough Diamonds
a) Banks are permitted to take decision on making advance payments to overseas mining companies on behalf of the importer, without any limit / bank guarantee/ stand-by letter of Credit. However the banks must ensure that:
i. The overseas mining company should have the
recommendation of GJEPC.
ii. The importer should be a
recognised processor of rough diamonds and should have a good track record.
iii. Banks should, undertake
the transaction based on their commercial judgment and after being satisfied
about the bonafides of the transaction.
iv. Advance payments should be
made strictly as per the terms of the sale contract and should be made directly
to the account of the company concerned.
v. Further, due caution may be
exercised to ensure that remittance is not permitted for import of conflict
diamonds (Kimberly Certification).
vi. KYC and due diligence
exercise should be done.
vii. Banks should follow-up
submission of the Bill of Entry / documents evidencing the import.
b) In case the importer entity
is a in the Public Sector or a Department / Undertaking of the Government of
India / State Government/s, Banks may permit the advance remittance subject to
the above conditions and a specific waiver of bank guarantee from the Ministry
of Finance, where the advance payments is equivalent to or exceeds USD
100,000/- (USD one hundred thousand only).
Advance Remittance for Import
of Aircrafts/Helicopters and other Aviation Related Purchases
1. Airline companies which
have been permitted by the Directorate General of Civil Aviation to operate as
a scheduled air transport service, can make advance remittance, up to USD 50
million, without obtaining a bank guarantee or an unconditional, irrevocable
Standby Letter of Credit, for direct import of each aircraft, helicopter and
other aviation related purchases.
2. Importers of Aircrafts/ Helicopters and other
Aviation related Purchases, not eligible under clause (1) above can make
advance remittance without bank guarantee, in terms of Para C.1.1 above.
The remittances for the above transactions shall be subject to the following conditions:
i The Banks should undertake the transactions
based on their commercial judgment and KYC guidelines both for the Indian
importer entity and the overseas manufacturer company .
ii. Advance payments should be
made strictly as per the terms of the sale contract and directly to the account
of the manufacturer (supplier) concerned.
iii. Banks may frame their own
internal guidelines to deal with such cases, with the approval of their Board
of Directors.
iv. In the case of a Public
Sector Company or a Department / Undertaking of Central /State Governments, the
Banks shall ensure that the requirement of bank guarantee has been specifically
waived by the Ministry of Finance, Government of India for advance remittances
exceeding USD 100,000.
v. Physical import of goods
into India is made within six months (three years in case of capital goods)
from the date of remittance and the importer gives an undertaking to furnish
documentary evidence of import within fifteen days from the close of the
relevant period. It is clarified that where advance is paid as milestone
payments, the date of last remittance made in terms of the contract will be
reckoned for the purpose of submission of documentary evidence of import.
vii. Prior to making the
remittance, the bank may ensure that the requisite approval of the Ministry of
Civil Aviation / DGCA / other agencies in terms of the extant Foreign Trade
Policy has been obtained by the company, for import.
vii. In the event of non-import
of aircraft and aviation sector related products, Banks should ensure that the
amount of advance remittance is immediately repatriated to India.
Prior approval of the
concerned Regional Office of the Reserve Bank will be required in case of any
deviation from the above stipulations.
Advance Remittance for the
Import of Services
Bank may allow advance
remittance for import of services without any ceiling subject to the following
conditions:
(a) Where the amount of
advance exceeds USD 500,000 or its equivalent, a guarantee from a bank of
international repute situated outside India, or a guarantee from an AD Category
– I bank in India, if such a guarantee is issued against the counter-guarantee
of a bank of international repute situated outside India, should be obtained
from the overseas beneficiary.
(b) In the case of a Public
Sector Company or a Department/ Undertaking of the Government of India/ State
Governments, approval from the Ministry of Finance, Government of India for
advance remittance for import of services without bank guarantee for an amount
exceeding USD 100,000 (USD One hundred thousand) or its equivalent would be
required.
(c) AD Category – I banks
should also follow-up to ensure that the beneficiary of the advance remittance
fulfils his obligation under the contract or agreement with the remitter in
India, failing which, the amount should be repatriated to India.
Interest on Import Bills
(i) Bank may allow payment of
interest on usance bills or overdue interest on delayed payments for a period
of less than three years from the date of shipment at the rate prescribed for
trade credit from time to time.
(ii) In case of pre-payment of
usance import bills, remittances may be made only after reducing the
proportionate interest for the unexpired portion of usance at the rate at which
interest has been claimed or LIBOR of the currency in which the goods have been
invoiced, whichever is applicable. Where interest is not separately claimed or
expressly indicated, remittances may be allowed after deducting the
proportionate interest for the unexpired portion of usance at the prevailing
LIBOR of the currency of invoice.
Where goods are
short-supplied, damaged, short-landed or lost in transit and the Exchange
Control Copy of the import licence has already been utilised to cover the
opening of a letter of credit against the original goods which have been lost,
the original endorsement to the extent of the value of the lost goods may be
cancelled by the AD Category – I bank and fresh remittance for replacement
imports may be permitted without reference to Reserve Bank, provided, the
insurance claim relating to the lost goods has been settled in favour of the
importer. It may be ensured that the consignment being replaced is shipped
within the validity period of the license.
In case replacement goods for
defective import are being sent by the overseas supplier before the defective
goods imported earlier are reshipped out of India, AD Category-I banks may
issue guarantees at the request of importer client for dispatch/return of the
defective goods, according to their commercial judgment.
AD Category – I bank may allow
BPO companies in India to make remittances towards the cost of equipment to be
imported and installed at their overseas sites in connection with the setting
up of their International Call Centres (ICCs) subject to the following conditions:
(i) The BPO company should
have obtained necessary approval from the Ministry of Communications and
Information Technology, Government of India and other authorities concerned for
setting up of the ICC.
(ii) The remittance should be
allowed based on the Banks’ commercial judgment, the bonafides of the
transactions and strictly in terms of the contract.
(iii) The remittance is made
directly to the account of the overseas supplier.
(iv) The AD Category – I banks
should also obtain a certificate as evidence of import from the Chief Executive
Officer (CEO) or auditor of the importer company that the goods for which
remittance was made have actually been imported and installed at overseas
sites.
Receipt of Import
Bills/Documents
Receipt of import documents by
the importer directly from overseas suppliers
Import bills and documents
should be received from the banker of the supplier by the banker of the
importer in India. AD Category – I bank should not, therefore, make remittances
where import bills have been received directly by the importers from the
overseas supplier, except in the following cases:
(i) Where the value of import
bill does not exceed USD 300,000.
(ii) Import bills received by
wholly-owned Indian subsidiaries of foreign companies from their principals.
(iii) Import bills received by
Status Holder Exporters as defined in the Foreign Trade Policy, 100% Export
Oriented Units / Units in Special Economic Zones, Public Sector Undertakings
and Limited Companies.
(iv) Import bills received by
all limited companies viz. public limited, deemed public limited and private
limited companies.
(v) Similarly Banks are permitted to allow
remittance for imports up to USD 300,000 where the importer of rough diamonds,
rough precious and semi-precious stones has received the import bills /
documents directly from the overseas supplier and the documentary evidence for
import is submitted by the importer at the time of remittance subject to the
same conditions as above.
Before extending the facility, banks should
obtain a report on each individual overseas supplier from the overseas banker
or reputed overseas credit rating agency.
Receipt of import documents by
the AD Category – I bank directly from overseas suppliers
(i) At the request of importer
clients, AD Category – I bank may receive bills directly from the overseas
supplier as above, provided the bank is fully satisfied about the financial
standing/status and track record of the importer customer.
Physical Imports
(i) In case of all imports,
where value of foreign exchange remitted / paid for import into India exceeds
USD 100,000 or its equivalent, it is obligatory on the part of the AD Category
– I bank through which the relative remittance was made, to ensure that the
importer submits :-
(a) The Exchange Control Copy
of the Bill of Entry for Home Consumption, or
(b) The Exchange Control Copy
of the Bill of Entry for warehousing, in case of 100% Export Oriented Units,
or(c) Customs Assessment Certificate or Postal Appraisal Form, as declared by
the importer to the Customs Authorities, where import has been made by post, as
evidence that the goods for which the payment was made have actually been
imported into India.
(ii) In respect of imports on
Delivery against acceptance basis, AD Category – I bank should insist on
production of evidence of import at the time of effecting remittance of import
bill. However, if importers fail to produce documentary evidence due to genuine
reasons such as non- arrival of consignment, delay in delivery/ customs
clearance of consignment, etc., AD bank may, if satisfied with the genuineness
of request, allow reasonable time, not exceeding three months from the date of
remittance, to the importer to submit the evidence of import.
C.7.2. Evidence of Import in
Lieu of Bill of Entry
(i) AD Category – I bank may
accept, in lieu of Exchange Control Copy of Bill of Entry for home consumption,
a certificate from the Chief Executive Officer (CEO) or auditor of the company
that the goods for which remittance was made have actually been imported into
India provided :-
(a) The amount of foreign
exchange remitted is less than USD 1,000,000 or its equivalent and
(b) The importer is a company
listed on a stock exchange in India and whose net worth is not less than Rs.100
crore as on the date of its last audited balance sheet, or, the importer is a
public sector company or an undertaking of the Government of India or its
departments.
(ii) The above facility may
also be extended to autonomous bodies, including scientific bodies/academic
institutions, such as Indian Institute of Science / Indian Institute of
Technology, etc. whose accounts are audited by the Comptroller and Auditor
General of India (CAG). AD Category – I bank may insist on a declaration from
the auditor/CEO of such institutions that their accounts are audited by CAG.
Non-physical Imports
(i) Where imports are made in
non-physical form, i.e., software or data through internet / datacom channels
and drawings and designs through e-mail / fax, a certificate from a Chartered
Accountant that the software / data / drawing/ design has been received by the
importer, may be obtained.
(ii) AD Category – I bank
should advise importers to keep Customs Authorities informed of the imports
made by them under this clause.
Issue of Acknowledgement
AD Category – I bank should
acknowledge receipt of evidence of import e.g. Exchange Control Copy of the
Bill of Entry, Postal Appraisal Form, or Customs Assessment Certificate, etc.,
from importers by issuing acknowledgement slips containing all relevant
particulars relating to the import transactions.
(i) Inspectors or auditors
should carry out verification of the documents evidencing import.
(ii) Documents evidencing
import into India should be preserved for a period of one year from the date of
their verification. However, in respect of cases which are under investigation
by investigating agencies, the documents may be destroyed only after obtaining
clearance from the investigating agency concerned.
(i) In case an importer does
not furnish any documentary evidence of import, within 3 months from the date
of remittance involving foreign exchange exceeding USD 100,000, the AD Category
– I bank should rigorously follow-up for the next 3 months, including issuing
registered letters to the importer.
(ii)
Banks should submit a statement as at the end of June & December of every
year, in form BEF furnishing details of import transactions, exceeding USD
100,000 in respect of which importers have defaulted in submission of
appropriate document evidencing import within 6 months from the date of
remittance using the online eXtensible
Business Reporting Language (XBRL) system on a Bank-wide basis, to the respective
Regional Offices of the RBI. The Statement should
be submitted within 15 days from the close of the
half-year to which the statement relates.
(iii) AD Category – I bank
need not follow up submission of evidence of import involving amount of USD
100,000 or less provided they are satisfied about the genuineness of the
transaction and the bonafides of the remitter. A suitable policy may be framed
by the bank's Board of Directors and AD Category – I bank may set their own
internal guidelines to deal with such cases.
AD Category – I banks are
permitted to issue guarantee on behalf of their importer customers.
- The 20:80 scheme of import of gold was withdrawn on
November 28, 2014. However, the obligation to export under the 20:80 scheme
would apply to the unutilised gold imported before November 28, 2014.
- Nominated banks and nominated agencies, as notified
by DGFT, are permitted to import gold on consignment basis. All sale of
gold domestically will, however, be against upfront payment. Nominated
banks are free to grant gold metal loans.
- Star and Premier Trading Houses (STH/PTH) can import
gold on Document against Payment (DP) basis as per entitlement without any
end use restrictions.
- The import of gold coins and medallions is
permitted. However, prohibition on sale of gold coins and medallions by
banks continues pending further review.
Head Offices / International
Banking Divisions of Banks shall henceforth submit the following
statements under XBRL system from
October 2014 onwards.
(a) Statement on half
yearly basis (end March / end September), showing the quantity and value of
gold imported by the nominated banks/ agencies/ EOUs/ SEZs in Gem &
Jewellery Sector, mode of payment-wise.
(b) Statement on monthly
basis showing the quantity and value of gold imports by the nominated agencies
(other than the nominated banks)/ EOUs/ SEZs in Gem & Jewellery sector
during the month as well as the cumulative position as at the end of the said
month beginning from the 1st month of the Financial Year.
Both the statements shall be
submitted, even if there is 'Nil' position, by the 10th of the following month
/ half year, to which it relates.
Import of Gold Jewellery
Including Jewellery Made of Precious Metals or/and Studded With Diamonds /
Precious Stones /Semi-precious.
Suppliers’ and Buyers’ credit
(trade credit) including the usance period of Letters of Credit opened for
import of gold in any form, including jewellery made of gold/precious metals
or/and studded with diamonds/semi- precious/precious stones, should not exceed
90 days from the date of shipment.
Import of Other Precious
Metals
Import of Platinum
/Palladium/Rhodium/ Silver/ Rough, Cut & Polished Diamonds / Precious and
Semi-precious Stones.
(a) Suppliers’ and Buyers’
Credit, including the usance period of Letters of Credit opened for import of
Platinum, Palladium, Rhodium and Silver and rough, cut and polished Diamonds,
Precious and semi-precious stones; should not exceed 90 days from the date of
shipment.
However for “Clean Credit i.e.
credit given by a foreign supplier to its Indian customer/ buyer, without any
Letter of Credit (Suppliers’ Credit) / Letter of Undertaking (Buyers’ Credit) /
Fixed Deposits from any Indian financial institution for import of rough, cut
and polished diamonds, precious and semi-precious stones, may be permitted for
a period not exceeding 180 days from the date of shipment.”
(b) AD Category – I banks
should ensure adherence of due diligence, Know Your Customer (KYC) norms and
Anti-Money Laundering (AML) guidelines. Further, any large or abnormal increase
in the volume of business should be closely examined.
Import of Platinum / Silver on
Unfixed Price Basis
The nominated agency/bank may
allow import of platinum and silver, on outright purchase basis subject
to the condition that although ownership of the same shall be passed on to the
importers at the time of import itself, the price shall be fixed later as and when the importer
sells to the user.
(i) AD Category – I bank may
enter into arrangements with international factoring companies of repute,
preferably members of Factors Chain International, without the approval of
Reserve Bank.
(ii) They will have to ensure
compliance with the extant foreign exchange directions relating to imports,
Foreign Trade Policy in force and any other guidelines/directives issued by
Reserve Bank in this regard.
For a trade to be classified
as Merchanting Trade following conditions should be satisfied:
a. Goods acquired should not
enter the Domestic Tariff Area and
b. The state of the goods should not undergo any transformation.
b. The state of the goods should not undergo any transformation.
AD Category – I bank may
handle bonafide Merchanting Trade Transactions and ensure that:
(a) Goods involved in the
transactions are permitted for export / import under the prevailing Foreign
Trade Policy (FTP) of India and all the rules, regulations and directions are
complied with for the export leg and import leg, respectively,
(b) Both the legs of a
Merchanting Trade Transaction are routed through the same AD bank. The bank
should verify the documents like invoice, packing list, transport documents and
insurance documents and satisfy itself about the genuineness of the trade.
(c) The entire Merchanting
Trade Transactions should be completed within an overall period of nine months
and there should not be any outlay of foreign exchange beyond four months.
(d) The commencement of
Merchanting Trade would be the date of shipment / export leg receipt or import
leg payment, whichever is first. The completion date would be the
date of shipment / export leg receipt or import leg payment, whichever is
the last;
(e) Short-term credit either
by way of suppliers' credit or buyers' credit will be available for Merchanting
Trade Transactions, to the extent not backed by advance remittance for the
export leg, including the discounting of export leg LC by an AD bank, as in the
case of import transactions ;
(f) In case advance against
the export leg is received by the Merchanting Trader, AD bank should ensure
that the same is earmarked for making payment for the respective import leg.
However, AD bank may allow short-term deployment of such funds for the
intervening period in an interest bearing account;
(g) Merchanting Traders may be
allowed to make advance payment for the import leg on demand made by the
overseas seller. In case where inward remittance from the overseas buyer is not
received before the outward remittance to the overseas supplier, AD bank may
handle such transactions by providing facility based on commercial judgement.
It may, however, be ensured that any such advance payment for the import leg
beyond USD 200,000/- per transaction, should be made against Bank Guarantee /
LC from an international bank of repute, except in cases and to the extent
where payment for export leg has been received in advance;
(h) Letter of Credit to the
supplier is permitted against confirmed export order keeping in view the outlay
and completion of the transaction within nine months;
(i) Payment for import leg may
also be allowed to be made out of the balances in Exchange Earners Foreign
Currency Account (EEFC) of the Merchant Trader.
(j) AD bank should ensure
one-to-one matching in case of each Merchanting Trade transaction and report
defaults in any leg by the traders to the concerned Regional Office of RBI, on
half yearly basis in the format as given in Annex 1, within 15 days from
the close of each half year, i.e. June and December.
(k) Defaulting Merchanting
Traders, whose outstandings reach 5% of their annual export earnings, would be
caution-listed.
(l) The KYC and AML guidelines
should be observed by the AD bank while handling such transactions.
Merchanting Traders have to be
genuine traders of goods and not mere financial intermediaries. Confirmed
orders have to be received by them from the overseas buyers. AD banks should
satisfy themselves about the capabilities of the Merchanting Trader to perform
the obligations under the order. The overall Merchanting Trade should result in
reasonable profits to the Merchanting Trader.
Merchanting trade to Nepal and Bhutan
Merchanting trade to Nepal and Bhutan
As Nepal and Bhutan are
landlocked countries, there is a facility of transit trade whereby goods are
imported from third countries by Nepal and Bhutan through India under the cover
of Customs Transit Declarations in terms of the Government of India Treaty of
Transit with these two countries. In consultation with Government of
India, it is clarified herein that goods consigned to the importers of Nepal
and Bhutan from third countries under merchanting trade from India would
qualify as traffic-in-transit, if the goods are otherwise compliant with the
provisions of the India-Nepal Treaty of Transit and Indo-Bhutan Treaty of
Transit respectively.
Based on the Master Circular
of 1/7/15
Please visit www.rbi.org.in in case of need Poppy
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