NASSCOM Community Admin

Timeline for reconciliation of all export Transactions in EDPMS by exporters extended till June 30, 2017

Blog Post created by NASSCOM Community Admin on Jun 2, 2017

Dear All,

 

Glad to share a communication received by NASSCOM from RBI which provides for an extension of the relaxation in the timeline for reconciliation of all export Transactions by all exporters till June 30, 2017.

 

You would be aware that the New Export Data Processing and Monitoring System (EDPMS) introduced by the Reserve Bank of India mandated for the reconciliation of all export Transactions files after Feb 2014 by 30th April, 2017.  Some of the NASSCOM member companies had highlighted serious capacity and system constraints due to which they were unable to meet the stipulated timelines and hence were facing the risk of being in the caution list.

 

NASSCOM Policy team in Delhi had raised the issue with RBI requesting for a relaxation in timelines. We are glad that our recommendations are considered. The existing extension / relaxation which is valid till June 30, 2017 is aimed at giving further time to AD banks to clear the entries in the EDPMS. The extension is operationalized as under (quoted from the RBI communication):

 

For any exporter, if the outstanding export bills’ amount is up to 20 per cent of total export bills or the number of open export bills is up to 10 as indicated in the caution list appearing in EDPMS site then AD should not treat such exporters as caution listed till June 30, 2017 subject to satisfaction of the AD based on following documentary evidence(s):

 

  1. The exporter has declared that the export proceeds have been realized in full for the export bills lying open in EDPMS and eBRC has been issued by bank/s.
  2. In cases where the bills are not realized / partially realized, then the exporter should have submitted request to AD bank(s) for (a) extension of time for realization of export bills and / or (b) request to AD bank(s) for write off of export bills (fully or partially, as the case may be).
  3. Request for cancellation of shipping bill has been submitted by the exporter.

 

Exporters not falling within above category  i.e. the outstanding export bills’ amount is more than 20 per cent of total export bills and the number of open export bills is more 10 but, are otherwise fulling the conditions at ( i ) to (iii) above shall have to obtain prior approval from RBI. In such cases, AD banks, after verifying above condition, may forward, the cases to RBI for exemption. AD banks have been advised to inform the exporters that their requests to RBI in this regard has necessarily to be routed through the former.

 

Concerns on part of the exporters listed by RBI (quoted from the RBI communication)

 

RBI has also raised with us some of the concerns and lapses on part of the exporters. We would request you to take note of these and ensure no lapses at your end.

 

  1. Prior to implementation of EDPMS in March 2014, export related data and status of exports were not available at a single platform, making the monitoring process difficult.
  2. EDPMS simplified the procedure for filling various returns related to export. Development of EDPMS facilitated the banks to report various returns to RBI through a single platform. In the system, the primary data on exports transactions including offsite software exports from all the sources viz. Customs/SEZ/STPI flow to RBI secured server and the same is available with the respective banks for follow up with the exporters. In the System, the document submission and realization of export proceeds is reported back by the AD banks to RBI through the same secured RBI server so as to facilitate follow up/ data generation. 
  3. The condition regarding caution listing of exporters, if the export bill is not realized beyond two years, is quite old. EDPMS, with the objective of automated processing and monitoring of export data, has only automated the caution listing process. 
  4. As full export proceeds have to be realized in 9 months (present stipulation), you would appreciate that 2 year is sufficiently long period to complete realization and get the requisite formalities complete post realization.
  5. We observe that exporters have been caution listed as they failed to realize full export proceeds, (ii) failed to approach AD banks for extension, (iii) failed to approach AD banks for invoice reduction / write-off (either partial or full), (iv) declared name of different AD bank at the time of initiation of export. Many did not realize that export proceeds have to be realized in full which was not the case. We understand that invoice reduction and invoice/ softex cancellation were not given due attention (the invoice reductions are on account of a) Volume Discount b) Bank charges c) Withholding tax and Invoice / Softex Cancellation are due to scenarios like a) Buyer accepted efforts and invoiced efforts are not matching b) Milestone value approved buyer and invoiced milestone differed c) Invoice rejected by buyer due to variation/change in PO number d) Change in Budget plan of the buyer e) Initial invoice wrongly raised). While for invoice reduction, the exporters should approach the AD bank, cancellation should come from STPI.
  6. Though, we do not want to save or hide inefficiencies of the AD banks in handling the matter by giving our comments at (e) above and they have to take bigger blame, we observe that for about 25 per cent of the cases, exporters have to complete formalities.
  7. The feature of automated caution listing though announced by the RBI in May 2016 and which was to be made effective from June 15, 2016 was to be deferred time and again by RBI in view of consistent representations from exporters and banks. We observe that no efforts were taken to sanitise the data in EDPMS in the interim, nor exporters thought of appreciating RBI’s Circular dated May 26, 2016 in this regard. The Supreme Court appointed SIT and other Government authorities were writing to RBI continuously to share the data of export unrealized but every time we have to plead before them for forbearance. Finally when the feature of automated caution listing was operationalized in EDPMS with effect from March 01, 2017, after giving sufficient time, all concerned were found unprepared.
  8. You should appreciate that even after 1 year from the date of announcement of automated caution listing, the data stand unreconciled involving around 16 lakh export bills.
  9. On the issue of multiple login-IDs for EDPMS, we inform that the same is not required as all bank branches are not required to work online on EDPMS (nor it is warranted). The application leverages IT systems of the banks. The User ID provided to the banks for EDPMS is required only at the time of down loading export data from EDPMS and, thereafter, the data has to be shared by the banks among their branches using their own networks for updation (at least two user IDs have been provided to most of the banks to download the data). The upload of updated data to EDPMS again requires single user ID of banks. Since, it is a batch process mechanism, once the updated data is uploaded (which is normally done in the evening by the banks).

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