Shipment of goods to be made within the stipulated period from the date of receipt of advance payment for exports

Delay in Uti­liza­tion of Advance Received for Exports — Cir­cu­lar — Dat­ed 9–2‑2015 — FEMA

RBI/2014–15/461

A. P. (DIR Series) Cir­cu­lar No. 74

Feb­ru­ary 09, 2015

To

All Category‑I Autho­rised Deal­er Banks

Madam / Sir,

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 goodsis 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) are­com­plet­ed 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.

Yours faith­ful­ly,

(C. D. Srinivasan)

Chief Gen­er­al Manager