RBI Grants Powers to AD Banks with Respect to Approval Processes for Export of Goods and Services

In relation to the approval processes for export of goods and services, the RBI by a Circular dated December 4, 2020 has delegated the following powers to the Authorised Dealer Banks (‘AD Banks’):

i.     The ceiling of US$1 million has been removed and AD Banks have been allowed to regularize dispatch by the exporter directly to the consignee or his agent, resident in the country of final destination;

ii.      Power to write-off without limits has been delegated to AD Banks even in cases where documents are dispatched directly to the exporter;

iii.    AD Banks will now be permitted to allow Indian companies to set-off their export receivables against import payables for goods and services with their overseas group or associate companies, either on net basis or gross basis through a centralised treasury arrangement; and

iv.   AD Banks will be able to consider refund requests without insisting on import of goods, which are perishable in nature, or had been auctioned or destroyed by the port, customs. At present, refund of export proceeds to the overseas importer is required to be made due to poor quality of the goods exported.