Reserve Bank of India (RBI) has discontinued the automatic caution-listing of exporters saying it had become a threat since the outbreak of coronavirus. Apparel industry has thanked the RBI for this initiative.
Apparel Export Promotion Council (AEPC) Chairman Dr. A. Sakthivel said, “It will provide flexibility to exporters in realisation of their export proceeds. Considering the pandemic-related payment difficulties, its continuation was a threat to many exporters.
The RBI introduced Export Data Processing and Monitoring System (EDPMS) in 2014 for all banks to bring their transactions with the exporters online.
In 2016, it launched the system-based automatic caution-listing wherein exporters were put on RBI’s caution list if any shipping bill against them remained open for more than 2 years in EDPMS and there was no extension granted by the bank or RBI.
Besides, the authorised dealer (AD) banks also recommended names of exporters to be put on caution list.
“We thank RBI for the changes in the EDPMS making it more exporter friendly and equitable, wherein it has been decided to discontinue the automatic caution-listing and instead base it on the case-specific recommendations of the AD bank,” he said in a letter to the RBI Governor.
The automatic listing of exporters in RBI’s caution list can further worsen the plight of exporters by denying them packing credit and the delay in bank documents can lead to high demurrage charges.
