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Feedback from Reserve Bank of India regarding reconciliation of inward remittances and updating information on Export Data Processing and Monitoring System
Feedback from Reserve Bank of India regarding reconciliation of inward remittances and updating information on Export Data Processing and Monitoring System

March 10, 2023

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Background

In December 2022, we had written to the RBI highlighting issues being faced by the industry in processing of export documents including SOFTEX and reconciliation of inward remittances, updating information on the Export Data Processing and Monitoring System (EDPMS) and generating the electronic Bank Realisation Certification (eBRC). Specifically, we highlighted that:

  • AD banks insist on submission of hard copy of invoices and SOFTEX forms. There is no digital system in place for submission and acknowledgement of export documents by AD banks.
  • At the time of submission of documents by the exporters, AD banks do not give any proof of receipt/acknowledgement slip.
  • Even after submission of documents, reminder e-mails are received demanding submission of export documents. These e-mails, sometimes, even provide for levy of penalty in case of non-submission of relevant documents, the possibility of withdrawal of banking services by the AD bank and reporting of non-compliance to the RBI/Enforcement Directorate.
  • There are delays in processing of documents by AD banks. As a result, there are delays in updating the information on EDPMS portal, which ultimately prevents the exporters from obtaining the eBRC.

Accordingly, we had requested RBI to prescribe a definite timeline for the AD banks to process the export documents and update information on the EDPMS portal; direct the AD banks to acknowledge receipt of export documents at the time of submission by the exporter and encourage AD banks to establish digital systems for receiving export documents against inward remittances.

 

RBI’s Feedback

In reference to RBI’s Master Directions on Export of Goods and Services dated January 1, 2016, RBI has informed of the following steps that AD bank must take regarding the reconciliation of inward remittances:

  1. When bills remain outstanding beyond the due date for payment, the matter should be promptly taken up with the concerned exporter. If the exporter fails to arrange for delivery of the proceeds within the timelines, the matter should be reported with reasons to RBI.
  2. The copies of EDF/SOFTEX Forms should be held by AD banks until the full proceeds are realised, except in case of undrawn balances.
  3. Any laxity in the follow-up of realisation of export proceeds by AD banks can lead to invocation of the penal provision under Foreign Exchange Management Act, 1999.
  4. With the operationalisation of EDPMS, realisation of all export transactions for shipping documents after February 28, 2014 should be reported in EDPMS.

With respect to the delays by AD banks in reconciliation of export documents, RBI has requested for case-specific details for their consideration and further action. RBI has also indicated that the matter may be further discussed with Foreign Exchange Dealers’ Association of India (FEDAI).

 

Way Forward

We will reach out to FEDAI to highlight the concerns of the industry and discuss the possibilities of improving the overall system for reconciliation of export documents. We would also write to the RBI with specific cases of delays being faced by exporters in reconciliation of inward remittances.

If you are an exporter and have been facing issues with respect to delays by Ad banks in reconciliation of inward remittances even after you have submitted all required documents, kindly write to us at garima@nasscom.in and policy@nasscom.in.

 


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Garima Prakash
Manager, Public Policy and Government Affairs

Reach out to me for all things policy about e-commerce, international trade, export controls, start-ups and fintech

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