Apparel exporters have welcomed Reserve Bank of India’s (RBI) decision to liberalise the rules for writing off unrealised export bills.
They believe that RBI’s move to simplify its procedures for writing off unrealised export bills particularly during the prevailing circumstances has come as a big relief to the exporters who had anyway invested in the consignments that gave no return.
Dr. A. Sakthivel, Chairman, Apparel Export Promotion Council (AEPC), wrote a letter to RBI Governor Shaktikanta Das and thanked the central bank for permitting Authorised Dealer (AD) banks to write off unrealised export bills of any amount, which earlier was allowed only up to a certain limit beyond which the AD bank had to approach RBI for approval.
“We also welcome the decision to allow AD banks to regularise cases of direct dispatch of shipping documents by the exporter irrespective of the value of export shipment, and to set off export receivables against import payables with overseas group/associate,” he said and further added that the AD banks have also been allowed to consider refund of export proceeds (due to poor quality of goods exported) without insisting on import of goods, which are perishable in nature or had been auctioned or destroyed by an authorised agency in the importing country.
It is being said that these changes have been done with the aim of simplifying the procedure, reducing the time taken for getting approvals and thereby reducing the regulatory cost.
These measures will be very helpful for the large number of cases where exporters have been suffering from non-realisation of export proceeds due to bankruptcy and insolvency.
“In fact, these measures recognise the growing need for addressing the increased risk in global business and need for timely redressal against such exposures in exports. More powers to AD banks will quicken the approval process, improve ease of doing business and enhance our export competitiveness,” Dr. Sakthivel said.
It is also pertinent to mention here that the Monetary Policy Committee (MPC) of the RBI kept the repo rate unchanged at 4 per cent and maintained an ‘accommodative’ stance.
The announcement of the same was made today.
