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Master
Circular on Import of Goods and Services
RBI/2008-2009/28
Master Circular No. 08/2009-10
July
1, 2009
To,
All
Category I Authorised Dealer Banks
Madam
/ Sir,
Master
Circular on Import of Goods and Services
Import
of Goods and Services into India is being allowed in terms of Section 5 of
the Foreign Exchange Management Act 1999 (42 of 1999), read with
Notification No. GSR 381(E) dated May 3, 2000 viz. Foreign Exchange
Management (Current Account) Rules, 2000 as amended from time to time.
2. This Master Circular consolidates the existing instructions on the
subject of "Import of Goods and Services" at
one place. The list of underlying circulars consolidated in this Master
Circular is furnished in the Appendix.
3. This Master Circular is being issued with a sunset
clause of one year. This circular will stand withdrawn on July 1, 2010 and
be replaced by an updated Master Circular on the subject.
Yours faithfully,
(Salim
Gangadharan)
Chief General Manager-in-Charge
PART
I
Section A - Introduction
(i)
Import trade is regulated by the Directorate General of Foreign Trade (DGFT)
under the Ministry of Commerce & Industry, Department of Commerce,
Government of India. Authorised Dealer Category I (AD Category I)
banks should ensure that the imports into India are in conformity with the
Foreign Trade Policy in force and Foreign Exchange Management (Current
Account Transactions) Rules, 2000 framed by Government of India vide
Notification No. G.S.R.381 (E) dated May 3, 2000 and the Directions issued
by Reserve Bank under Foreign Exchange Management Act, 1999 from time to
time.
(ii) AD Category I banks should follow normal banking procedures and
adhere to the provisions of Uniform Customs and Practices for Documentary
Credits (UCPDC), etc. while opening letters of credit for import into
India on behalf of their constituents.
(iii) Compliance with the provisions of Research & Development Cess
Act, 1986 may be ensured for import of drawings and designs.
(iv) AD Category I banks may also advise importers to ensure
compliance with the provisions of Income Tax Act, wherever applicable.
PART
II
Section B- General Guidelines for imports
B.1.
General Guidelines
Rules and regulations from the foreign exchange angle to be followed by
the AD Category I banks while undertaking import payment transactions
on behalf of their clients are set out in the following paragraphs. Where
specific regulations do not exist, AD Category I banks may be governed
by normal trade practices. AD Category I banks may particularly note
to adhere to "Know Your Customer" (KYC) guidelines issued by
Reserve Bank (Department of Banking Operations & Development) in all
their dealings.
B.2.
Form A-1
Applications by persons, firms and companies for making payments,
exceeding USD 500 or its equivalent, towards imports into India must be
made in Form A-1 (Annex-4).
B.3. Import Licenses
Except for goods included in the negative list which require licence under
the Foreign Trade Policy in force, AD Category - I banks may freely open
letters of credit and allow remittances for import. While opening letters
of credit, the For Exchange Control purposes copy of the licence
should be called for and special conditions, if any, attached to such
licences should be adhered to. After effecting remittances under the
licence, AD Category - I banks may preserve the copies of the utilised
licence /s till they are verified by the internal auditors or inspectors.
B.4. Obligation of Purchaser of Foreign Exchange
(i) In terms of Section 10(6) of the Foreign Exchange Management Act, 1999
(FEMA), any person acquiring foreign exchange is permitted to use it
either for the purpose mentioned in the declaration made by him to an
Authorised Dealer Category-I bank under Section 10(5) of the Act or to use
it for any other purpose for which acquisition of foreign exchange is
permissible under the said Act, or Rules or Regulations framed there
under.
(ii) Where foreign exchange acquired has been utilised for import of goods
into India, the AD Category I bank should ensure that the importer
furnishes evidence of import viz., Exchange Control copy of the Bill of
Entry, Postal Appraisal Form or Customs Assessment Certificate, etc., and
satisfy himself that goods equivalent to the value of remittance have been
imported.
(iii) In addition to the permitted methods of payment for imports laid
down in Notification No.FEMA14/2000-RB dated 3rd May 2000, payment for
import can also be made by way of credit to non-resident account of the
overseas exporter maintained with a bank in India. In such cases also AD
Category I banks should ensure compliance with the instructions
contained in sub-paragraphs (i) and (ii) above.
B.5.s
Time Limit for Settlement of Import Payments
B.5.1. Time limit for normal imports
(i) In terms of the extant regulations, remittances against imports should
be completed not later than six months from the date of shipment, except
in cases where amounts are withheld towards guarantee of performance, etc.
(ii) AD Category I banks may permit settlement of import dues delayed
due to disputes, financial difficulties, etc. Interest in respect of
delayed payments, usance bills or overdue interest for a period of less
than three years from the date of shipment may be permitted in terms of
the directions in para 5 of Part III below.
B.5.2. Time limit for deferred payment arrangements
Deferred payment arrangements, including suppliers and buyers credit,
providing for payments beyond a period of six months from date of shipment
up to a period of less than three years, are treated as trade credits for
which the procedural guidelines laid down in the Master Circular for
External Commercial Borrowings and Trade Credits may be followed.
B.5.3. Time limit for import of books
Remittances against import of books may be allowed without restriction as
to time limit, provided, interest payment, if any, is as per the
instructions in para 5 of Part III below.
B.6. Import of Foreign exchange / Indian Rupees
(i) Except as otherwise provided in the Regulations, no person shall,
without the general or special permission of the Reserve Bank, import or
bring into India, any foreign currency. Import of foreign currency,
including cheques, is governed by clause (g) of sub-section (3) of Section
6 of the Foreign Exchange Management Act, 1999, and the Foreign Exchange
Management (Export and Import of Currency) Regulations 2000, made by
Reserve Bank vide Notification No. FEMA 6/RB- 2000 dated May 3, 2000 as
amended from time to time.
(ii)
Reserve Bank may allow a person to bring into India currency notes of
Government of India and / or of Reserve Bank subject to such terms and
conditions as the Reserve Bank may stipulate.
B.6.1. Import of foreign exchange into India
A person may
(i) send into India without limit foreign exchange in any form other than
currency notes, bank notes and travelers cheques;
(ii) bring into India from any place outside India, without limit foreign
exchange (other than unissued notes), which shall be subject to the
condition that such person makes, on arrival in India, a declaration to
the Custom Authorities in Currency Declaration Form (CDF) annexed to these
Regulations; provided further that it shall not be necessary to make such
declaration where the aggregate value of the foreign exchange in the form
of currency notes, bank notes or travellers cheques brought in by such
person at any one time does not exceed USD10,000 (US Dollars ten
thousand) or its equivalent and/or the aggregate value of foreign currency
notes brought in by such person at any one time does not exceed USD 5,000
(US Dollars five thousand) or its be equivalent.
B.6.2. Import of Indian currency and currency notes
(i) Any person resident in India who had gone out of India on a temporary
visit, may bring into India at the time of his return from any place
outside India (other than from Nepal and Bhutan), currency notes of
Government of India and Reserve Bank notes up to an amount not
exceeding Rs.5,000/- per person.
(ii) A person may bring into India from Nepal or Bhutan, currency notes of
Government of India and Reserve Bank notes other than notes of
denominations of above Rs.100 in either case.
PART
III
Section C - Operational Guidelines for Imports
C.1.
Advance Remittance
C.1.1. Advance Remittance for import of
goods
(i) AD Category I bank may allow advance remittance for import of
goods without any ceiling subject to the following conditions:
(a) If the amount of advance remittance exceeds USD 100,000 or its
equivalent, an unconditional, irrevocable standby Letter of Credit or a
guarantee from an international bank of repute situated outside India or a
guarantee of an AD Category I bank in India, if such a guarantee is
issued against the counter-guarantee of an international bank of repute
situated outside India.
(b) In cases where the importer (other than a Public Sector Company or a
Department/Undertaking of the Government of India/State Governments) is
unable to obtain bank guarantee from overseas suppliers and the AD
Category I bank is satisfied about the track record and bonafides of
the importer, the requirement of the bank guarantee / standby Letter of
Credit may not be insisted upon for advance remittances up to USD
5,000,000 (US Dollar five million). AD Category I banks may frame
their own internal guidelines to deal with such cases as per a suitable
policy framed by the bank's Board of Directors.
(c) A Public Sector Company or a Department/Undertaking of the Government
of India / State Government/s which is not in a position to obtain a
guarantee from an international bank of repute against an advance payment,
is required to obtain a specific waiver for the bank guarantee from the
Ministry of Finance, Government of India before making advance remittance
exceeding USD 100, 000.
(ii) All payments towards advance remittance for imports shall be subject
to the specified conditions.
C.1.2. Advance Remittance for Import of Rough Diamonds
(i) AD Category I bank are permitted to allow advance remittance
without any limit and without bank guarantee or standby Letter of Credit,
by an importer (other than a Public Sector Company or a Department /
Undertaking of the Government of India / State Government/s), for import
of rough diamonds into India from the under noted mining companies, viz.
a) De Beers UK Ltd,
b) RIO TINTO, UK,
c) BHP Billiton, Australia,
d) ENDIAMA, E. P. Angola,
e) ALROSA, Russia,
f) GOKHARAN, Russia,
g) Rio Tinto, Belgium, and
h) BHP Billiton, Belgium.
(ii) While allowing the advance remittance, AD Category-I bank may ensure
the following:
(a)The importer should be a recognized processor of rough diamonds as per
a list to be approved by Gems and Jewellery Export Promotion Council (GJEPC)
in this regard and should have a good track record of export realisation;
(b) AD Category I bank should undertake the transaction based on their
commercial judgment and after being satisfied about the bonafides of the
transaction;
(c) Advance payments should be made strictly as per the terms of the sale
contract and should be made directly to the account of the company
concerned, that is, to the ultimate beneficiary and not through numbered
accounts or otherwise. Further, due caution may be exercised to ensure
that remittance is not permitted for import of conflict diamonds;
(d) KYC and due diligence exercise should be done by the AD Category I
bank for the Indian importer entity and the overseas company; and
(e) AD Category I bank should follow up submission of the Bill of
Entry / documents evidencing import of rough diamonds into the country by
the importer, in terms of FEMA / Rules / Regulations / Directions issued
in this regard.
(iii) In case of an importer entity in the Public Sector or a Department /
Undertaking of the Government of India / State Government/s, AD Category
I bank may permit advance remittance subject to the above conditions
and a specific waiver of bank guarantee from the Ministry of Finance,
Government of India where the advance payments is equivalent to or exceeds
USD 100,000.
(iv) AD Category I banks are required to submit a report (Annex-2) of
all such advance remittances made without a bank guarantee or standby
Letter of Credit, where the amount of advance payment is equivalent to or
exceeds USD 5,000,000, to the Chief General Manager, Reserve Bank of
India, Foreign Exchange Department, Trade Division, Central Office, Amar
Building, Sir. P. M. Road, Fort, Mumbai 400 001, on a half yearly
basis, as at the end of September and March every year, in the format
annexed (Annex-2).The report should be submitted within 15 days from the
close of the respective half year.
C.1.3. Advance Remittance for Import of
Aircrafts/Helicopters and other Aviation Related purchases
As a sector specific measure, airline companies which have been permitted
by the Directorate General of Civil Aviation to operate as a schedule air
transport service, can make advance remittance without bank guarantee, up
to USD 50 million. Accordingly, AD Category I banks may allow
advance remittance, without obtaining a bank guarantee or an
unconditional, irrevocable standby Letter of Credit, up to USD 50 million,
for direct import of each aircraft, helicopter and other aviation related
purchases. The remittances for the above transactions shall be subject to
the following conditions:
(i) The AD Category - I banks should undertake the transactions based on
their commercial judgment and after being satisfied about the bonafide of
the transactions. KYC and due diligence exercise should be done by the AD
Category - I banks for the Indian importer entity and the overseas
manufacturer company as well.
(ii) Advance payments should be made strictly as per the terms of the sale
contract and are made directly to the account of the manufacturer
(supplier) concerned.
(iii) AD Category - I bank may frame their own internal guidelines to deal
with such cases, with the approval of their Board of Directors.
(iv) In the case of a Public Sector Company or a Department / Undertaking
of Central /State Governments, the AD Category - I bank shall ensure that
the requirement of bank guarantee has been
specifically waived by the Ministry of Finance, Government of
India for advance remittances exceeding USD100,000.
(v) Physical import of goods into India is made within six months (three
years in case of capital goods) from the date of remittance and the
importer gives an undertaking to furnish documentary evidence of import
within fifteen days from the close of the relevant period. It is clarified
that where advance is paid as milestone payments, the date of last
remittance made in terms of the contract will be reckoned for the purpose
of submission of documentary evidence of import.
(vi) Prior to making the remittance, the AD Category I bank may ensure
that the requisite approval of the Ministry of Civil Aviation / DGCA /
other agencies in terms of the extant Foreign Trade Policy has been
obtained by the company, for import.
(vii) In the event of non-import of aircraft and aviation sector related
products, AD Category - I bank should ensure that the amount of advance
remittance is immediately repatriated to India.
Prior approval of the concerned Regional Office of the Reserve Bank will
be required in case of any deviation from the above stipulations.
C.1.4. Advance Remittance for the import of services
AD Category I bank may allow advance remittance for import of services
without any ceiling subject to the following conditions:
(a) Where the amount of advance exceeds USD 500,000 or its equivalent, a
guarantee from a bank of international repute situated outside India, or a
guarantee from an AD Category I bank in India, if such a guarantee is
issued against the counter-guarantee of a bank of international repute
situated outside India, should be obtained from the overseas beneficiary.
(b) AD Category I banks should also follow-up to ensure that the
beneficiary of the advance remittance fulfils his obligation under the
contract or agreement with the remitter in India, failing which, the
amount should be repatriated to India.
C.2. Interest on Import Bills
(i) AD Category I bank may allow payment of interest on usance
bills or overdue interest for a period of less than three years from the
date of shipment at the rate prescribed for trade credit from time to
time.
(ii) In case of pre-payment of usance import bills, remittances may
be made only after reducing the proportionate interest for the unexpired
portion of usance at the rate at which interest has been claimed or LIBOR
of the currency in which the goods have been invoiced, whichever is
applicable. Where interest is not separately claimed or expressly
indicated, remittances may be allowed after deducting
the proportionate interest for the unexpired portion of usance at
the prevailing LIBOR of the currency of invoice.
C.3. Remittances against Replacement Imports
Where goods are short-supplied, damaged, short-landed or lost in transit
and the Exchange Control copy of the import licence has already been
utilised to cover the opening of a letter of credit against
the original goods which have been lost, the original endorsement to
the extent of the value of the lost goods may be cancelled by the AD
Category I bank and fresh remittance for replacement imports may be
permitted without reference to Reserve Bank, provided the insurance claim
relating to the lost goods has been settled in favour of the importer. It
may be ensured that the consignment being replaced is shipped within the
validity period of the license.
C.4. Guarantee for Replacement Import
In case replacement goods for defective import are being sent by the
overseas supplier before the defective goods imported earlier are
reshipped out of India, AD Category I banks may issue guarantees at
the request of importer client for dispatch/return of the defective goods,
according to their commercial judgment.
C.5. Import of Equipment by Business Process
Outsourcing (BPO) Companies for their overseas sites
AD Category I bank may, allow BPO companies in India to make
remittances towards the cost of equipment to be imported and installed at
their overseas sites in connection with the setting up of their
International Call Centres (ICCs) subject to the following
conditions:
(i) The BPO company should have obtained necessary approval from the
Ministry of Communications and Information Technology, Government of
India and other authorities concerned for setting up of the ICC.
(ii) The remittance should be allowed based on the AD Category - I
banks commercial judgment, the bonafides of the transactions and
strictly in terms of the contract.
(iii) The remittance is made directly to the account of the overseas
supplier.
(iv) The AD Category I banks should also obtain a certificate as
evidence of import from the Chief Executive Officer (CEO) or auditor of
the importer company that the goods for which remittance was made have
actually been imported and installed at overseas sites.
C.6. Receipt of Import Bills/Documents
C.6.1. Receipt of import documents by the
importer directly from overseas suppliers Import bills and documents
should be received from the banker of the supplier by the banker of the
importer in India. AD Category I bank should not, therefore, make
remittances where import bills have been received directly by the
importers from the overseas supplier, except in the following cases:
(i) Where the value of import bill does not exceed USD 300,000.
(ii) Import bills received by wholly-owned Indian subsidiaries of foreign
companies from their principals.
(iii) Import bills received by Status Holder Exporters as defined in the
Foreign Trade Policy, 100% Export Oriented Units / Units in Special
Economic Zones, Public Sector Undertakings and Limited Companies.
(iv) Import bills received by all limited companies viz. public limited,
deemed public limited and private limited companies.
C.6.2. Receipt of import documents by the
importer directly from overseas suppliers in case of specified sectors
As a sector specific measure, AD Category - I banks are permitted to allow
remittance for imports up to USD 300,000 where the importer of rough
diamonds, rough precious and semi-precious stones has received the import
bills / documents directly from the overseas supplier and the documentary
evidence for import is submitted by the importer at the time of
remittance. AD Category - I banks may undertake such transactions subject
to the following conditions:
(i) The import would be subject to the prevailing Foreign Trade Policy.
(ii) The transactions are based on their commercial judgment and they are
satisfied about the bonafides of the transactions.
(iii) AD Category - I banks should do the KYC and due diligence
exercise and should be fully satisfied about the financial standing /
status and track record of the importer customer. Before extending the
facility, they should also obtain a report on each individual overseas
supplier from the overseas banker or reputed credit rating agency
overseas.
C.6.3. Receipt of import documents by the AD Category I
bank directly from overseas suppliers
(i) At the request of importer clients, AD Category I bank may receive
bills directly from the overseas supplier as above, provided the AD
Category I bank is fully satisfied about the financial standing/status
and track record of the importer customer.
(ii) Before extending the facility, the AD Category I bank should
obtain a report on each individual overseas supplier from the overseas
banker or a reputed credit agency. However, such credit report on the
overseas supplier need not be obtained in cases where the invoice value
does not exceed USD 300,000 provided the AD Category I bank is
satisfied about the bonafides of the transaction and track record of
the importer constituent.
C.7. Evidence of Import
C.7.1. Physical Imports
(i) In case of all imports, where value of foreign exchange remitted/paid
for import into India exceeds USD 100,000 or its equivalent, it is
obligatory on the part of the AD Category I bank through whom the
relative remittance was made, to ensure that the importer submits :-
(a) The Exchange Control copy of the Bill of Entry for home consumption,
or
(b) The Exchange Control copy of the Bill of Entry for warehousing, in
case of 100% Export Oriented Units, or
(c) Customs Assessment Certificate or Postal Appraisal Form, as declared
by the importer to the Customs Authorities, where import has been made by
post, as evidence that the goods for which the payment was made have
actually been imported into India.
(ii) In respect of imports on D/A basis, AD Category I bank should
insist on production of evidence of import at the time of effecting
remittance of import bill. However, if importers fail to produce
documentary evidence due to genuine reasons such as non-arrival of
consignment, delay in delivery/customs clearance of consignment, etc., AD
bank may, if satisfied with the genuineness of request, allow reasonable
time, not exceeding three months from the date of remittance, to the
importer to submit the evidence of import.
C.7.2. Evidence of import in lieu of Bill of Entry
(i) AD Category I bank may accept, in lieu of Exchange Control copy of
Bill of Entry for home consumption, a certificate from the Chief Executive
Officer (CEO) or auditor of the company that the goods for which
remittance was made have actually been imported into India provided :-
(a) the amount of foreign exchange remitted is less than USD 1,000,000 or
its equivalent,
(b) the importer is a company listed on a stock exchange in India and
whose net worth is not less than Rs.100 crore as on the date of its last
audited balance sheet,
or
the importer is a public sector company or an undertaking of the
Government of India or its departments.
(ii) The above facility may also be extended to autonomous bodies,
including scientific bodies/academic institutions, such as Indian
Institute of Science / Indian Institute of Technology, etc. whose accounts
are audited by the Comptroller and Auditor General of India (CAG). AD
Category I bank may insist on a declaration from the auditor/CEO of
such institutions that their accounts are audited by CAG.
C.7.3. Non Physical Imports
(i) Where imports are made in non-physical form, i.e., software or data
through internet / datacom channels and drawings and designs through
e-mail/fax, a certificate from a Chartered Accountant that the software /
data / drawing/ design has been received by the importer, may be obtained.
(ii) AD Category I bank should advise importers to keep Customs
Authorities informed of the imports made by them under this clause.
C.8. Issue of acknowledgement
AD Category I bank should acknowledge receipt of evidence of import
e.g. Exchange Control copy of the Bill of Entry, Postal Appraisal Form or
Customs Assessment Certificate, etc., from importers by issuing
acknowledgement slips containing all relevant particulars relating to the
import transactions.
C.9. Verification and Preservation
(i) Internal inspectors or auditors (including external auditors appointed
by AD Category I bank) should carry out verification of the documents
evidencing import, e.g. Exchange Control copies of Bills of Entry or
Postal Appraisal Forms or Customs Assessment Certificates, etc.,
(ii). Documents evidencing import into India should be preserved by AD
Category I bank for a period of one year from the date of its
verification. However, in respect of cases which are under investigation
by investigating agencies, the documents may be destroyed only after
obtaining clearance from the investigating agency concerned.
C.10. Follow up for Import Evidence
(i) In case an importer does not furnish any documentary evidence of
import, as required under paragraph C.7. of Part III, within 3 months from
the date of remittance involving foreign exchange exceeding USD100,000,
the AD Category I bank should rigorously follow-up for the next
3 months, including issuing registered letters to the importer.
(ii) AD Category I bank should forward a statement on half-yearly
basis as at the end of June & December of every year, in form BEF
(Annex 1) furnishing details of import transactions, exceeding USD
100,000 in respect of which importers have defaulted in submission of
appropriate document evidencing import within 6 months from the date of
remittance, to the Regional Office of Reserve Bank under whose
jurisdiction the AD Category I bank is functioning, within 15 days
from the close of the half-year to which the statement relates.
(iii) AD Category I bank need not follow up submission of evidence of
import involving amount of USD 100,000 or less provided they are satisfied
about the genuineness of the transaction and the bonafides of the
remitter. A suitable policy may be framed by the bank's Board of Directors
and AD Category I bank may set their own internal guidelines to deal
with such cases.
C.11. Issue of Bank Guarantee
AD Category I banks are permitted to issue guarantee on behalf of
their importer customers in terms of Notification No. FEMA 8/2000-RB dated
May 3, 2000, as amended from time to time.
C.12. Import of Gold / Platinum / Silver by
Nominated Banks / Agencies
C.12.1. Import on consignment basis
Gold may be imported by the nominated agencies/banks on consignment basis
where the ownership will remain with the supplier and the importer
(consignee) will be acting as an agent of the supplier (consignor).
Remittances towards the cost of import shall be made as and when sales
take place and in terms of the provisions of agreement entered into
between the overseas supplier and nominated agency/bank. These
instructions would also apply to import of platinum and silver.
C.12.2. Import on unfixed price basis
The nominated agency/bank may import gold on outright purchase basis
subject to the condition that although ownership of the gold shall be
passed on to the importer at the time of import itself, the price of gold
shall be fixed later, as and when the importer sells the gold to the
users. These instructions would also apply to import of platinum and
silver.
C.13. Direct Import of Gold
AD Category I bank can open Letters of Credit and allow remittances on
behalf of EOUs, units in SEZs in the Gem & Jewellery sector and the
nominated agencies / banks, for direct import of gold, subject to the
following
(i) The import of gold should be strictly in accordance with the Foreign
Trade Policy.
(ii) Suppliers and Buyers Credit, including the usance period of LCs
opened for direct import of gold, should not exceed 90 days.
(iii) Banker's prudence should be strictly exercised for all transactions
pertaining to import of gold. AD Category I bank should ensure that
due diligence is undertaken and all Know Your Customer (KYC) norms and the
Anti-Money-Laundering guidelines, issued by Reserve Bank from time to time
are adhered to while undertaking such transactions. AD Category I bank
should closely monitor such transactions. Any large or abnormal increase
in the volume of business of the importer should be closely examined to
ensure that the transactions are bonafide trade transactions.
(iv) In addition to carrying out the normal due diligence exercise, the
credentials of the supplier should also be ascertained before opening the
LCs. The financial standing, line of business and the net worth of the
importer customer should be commensurate with the volume of business
turnover. Apart from the above, in case of such transactions banks should
also make discreet enquiries from other banks to assess the actual
position. Further, in order to establish audit trail of import/export
transactions, all documents pertaining to such transactions must be
preserved for at least five years.
(v) AD Category I bank should follow up submission of the Bill of
Entry by the importers as stipulated.
(vi) Head Offices/International Banking Divisions, of AD Category I
bank undertaking gold import transactions are required to
submit as per the format enclosed at Annex-3, a monthly statement thereof,
to the Chief General Manager, Trade Division, Foreign Exchange Department,
Amar Building, Central Office, Reserve Bank of India, Sir P.M. Road,
Fort, Mumbai 400 001.
C.14. Import of Platinum, Palladium, Rhodium
and Silver
(a) Suppliers and Buyers credit, including the usance period of
Letters of Credit opened for import of Platinum, Palladium, Rhodium and
Silver should not exceed 90 days from the date of shipment.
(b) AD Category I banks should ensure that due diligence is undertaken
and Know-Your-Customer (KYC) norms and Anti-Money Laundering (AML)
guidelines, issued by the Reserve Bank are adhered to while undertaking
import of these metals. Further, any large or abnormal increase in the
volume of business should be closely examined to ensure that the
transactions are bonafide and are not intended for interest / currency
arbitrage. All other instructions relating to import of these metals
shall continue.
C.15. Gold Loans
(i) Nominated agencies / authorised banks can import gold on loan basis
for on lending to exporters of jewellery under this scheme.
(ii) EOUs and units in SEZ who are in the Gem and Jewellery sector can
import gold on loan basis for manufacturing and export of jewellery on
their own account only.
(iii) The maximum tenor of gold loan would be as per the Foreign Trade
Policy 2004-2009, or as notified by the Government of India from time to
time in this regard.
(iv) AD bank may open Standby Letters of Credit (SBLC), for import
of gold on loan basis, where ever required, as per FEDAI guidelines dated
April 1, 2003. The tenor of the SBLC should be in line with the tenor of
the gold loan.
(v) SBLC can be opened only on behalf of entities permitted to import gold
on loan basis, viz. nominated agencies and 100% EOUs/units in SEZ, which
are in the Gem and Jewellery sector.
(vi) SBLC should be in favour of internationally renowned bullion banks
only. AD Category I bank can obtain a detailed list of internationally
renowned bullion banks from the Gem & Jewellery Export Promotion
Council.
(vii) All other existing instructions on import of gold and opening of
Letters of Credit, with usance period not exceeding 90 days, will continue
to be applicable.
(viii) AD Category I banks must maintain adequate documentation with
them to uniquely link all imports with the SBLC issued for the import of
gold on loan basis.
C.16. Import factoring
(i) AD Category I bank may enter into arrangements with international
factoring companies of repute, preferably members of Factors Chain
International, without the approval of Reserve Bank.
(ii) They will have to ensure compliance with the extant foreign exchange
directions relating to imports, Foreign Trade Policy in force and any
other guidelines/directives issued by Reserve Bank in this regard.
C.17. Merchanting Trade
AD Category I bank may take necessary precautions in handling bonafide
merchanting trade transactions or intermediary trade transactions to
ensure that:
(a) Goods involved in the transactions are permitted to be imported into
India, all rules, regulations and directions applicable to export (except
Export Declaration Form) and import (except Bill of Entry) are complied
with for the export leg and import leg, respectively.
(b) The entire merchant trade transaction is completed within a period of
6 months.
(c) The transactions do not involve foreign exchange outlay for a period
exceeding three months.
(d) Payment is received in time for the export leg.
(e) Where the payment for export leg of the transaction precedes the
payment for import leg, AD Category I banks should ensure that the
terms of payment are such that the liability for the import leg of the
transaction is extinguished by the payment received for the export leg of
the transaction, without any delay.
AD Category I banks may note that short-term credit either by way of
suppliers' credit or buyers' credit is not available for merchanting trade
or intermediary trade transactions.
PART
V
List
of Circulars consolidated in the Master Circular
Import of Goods and Services
-
AP
(DIR Series) Circular No. 106 dated June 19, 2003
-
AP
(DIR Series) Circular No. 4 dated July 19, 2003
-
AP
(DIR Series) Circular No. 9 dated August 18, 2003
-
AP
(DIR Series) Circular No. 15 dated September 17, 2003
-
AP
(DIR Series) Circular No. 49 dated December 15, 2003
-
AP
(DIR Series) Circular No. 66 dated February 6, 2004
-
AP
(DIR Series) Circular No. 72 dated February 20, 2004
-
AP
(DIR Series) Circular No. 2 dated July 9, 2004
-
AP
(DIR Series) Circular No. 34 dated February 18, 2005
-
AP
(DIR Series) Circular No. 1 dated July 12, 2005
-
AP
(DIR Series) Circular No. 33 dated February 28, 2007
-
AP
(DIR Series) Circular No. 34 dated March 2, 2007
-
AP
(DIR Series) Circular No. 63 dated May 25, 2007
-
AP
(DIR Series) Circular No. 77 dated June 29, 2007
-
AP
(DIR Series) Circular No. 18 dated November 7, 2007
-
AP
(DIR Series) Circular No. 37 dated April 16, 2008
-
AP
(DIR Series) Circular No. 03 dated August 4, 2008
-
AP
(DIR Series) Circular No. 08 dated August 21, 2008
-
AP
(DIR Series) Circular No. 09 dated August 21, 2008
-
AP
(DIR Series) Circular No. 12 dated August 28, 2008
-
AP
(DIR Series) Circular No. 13 dated September 1, 2008
-
AP
(DIR Series) Circular No. 15 dated September 8, 2008
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