Liquidation of Post-Shipment Rupee Export Credit
April 21, 2011
Members of the Council.
Sub : Liquidation of Post-Shipment Rupee Export Credit
The Reserve Bank of India has issued a Circular No. RBI/2010-11/477 dated April 18, 2011 on the above subject, wherein the following is stated.
a) As per regulations in force, the Post-shipment Rupee export credit availed by the exporters is to be liquidated by the proceeds of export bills received from abroad in respect of goods exported/ services rendered. Further, subject to mutual agreement between the exporter and the banker it can also be repaid/prepaid out of balances in Exchange Earners Foreign Currency (EEFC) Account as also from proceeds of any other unfinanced (collection) bills.
b) It has now been decided that in order to reduce the cost to exporters (i.e. interest cost on overdue export bills), exporters with overdue export bills may also extinguish their overdue post shipment rupee export credit from their rupee resources. However, the corresponding GR form will remain outstanding and the amount will be shown outstanding in XOS statement. The exporter’s liability for realisation would continue till the export bill is realised.
Members may kindly note the above.
Ali Ahmed Khan
COUNCIL FOR LEATHER EXPORTS