1. Import of Goods & Services

1.1 Advance Remittance for Import of Goods

  • Remittances for Import Payments

            2.2 Advance Remittance for the Import of Services

  • External commercial borrowing

3.1 Advantages of ECBs

  • Export of good and service

4.1 Manner of receipt and payment

Import of Goods & Services

Import is outlined as delivery into Asian country any item by ocean, land, air, or through electronic media. Management over the import of products and services into Asian countries is exercised by the Director-General of Foreign Trade (DGFT) beneath the Ministry of Commerce, Government of the Asian country.

Advance remittance for Import of Goods

AD class – I bank might permit advance remittance for import of products with no ceiling subject to the subsequent conditions:

a.         If the quantity of advance remittent exceeds USD 200,000 or its equivalent, associate unconditional, irrevocable Standby Letter of Credit or a guarantee from a world bank of repute set outside India or a guarantee of a billboard class – I bank in India, if such a guarantee is issued against the counter-guarantee of a world bank of repute set outside Asian country, is obtained.

b.         In cases wherever the businessperson is unable to get bank guarantee from overseas suppliers and also the AD class – I bank is glad concerning the memoir and bona-fides of the businessperson, the necessity of the bank guarantee/Standby Letter of Credit might not be insisted upon for advance remittances up to USD 5,000,00.

c.         A Public Sector Company or a Department/Undertaking of the government of Asian country / State Government/s that isn’t during position to get a guarantee from a world bank of repute against advance payment, is needed to get a selected discharge for the bank guarantee from the Ministry of Finance, Government of Asian country before creating advance remittent exceptional USD 100,000.

Remittances for Import Payments

AD class, I Banks might permit remittent for creating payments for imports into Asian country when guaranteeing that each one the requisite details square measure created out there by the businessperson and also the remittent is for real trade transactions as per applicable laws operative.

Advance remittent for the Import of Services

AD class – I bank might permit advance remittent for import of services with none ceiling subject to the subsequent conditions:

  • Where the quantity of advance exceeds USD 500,000 or its equivalent, a guarantee from a bank of international repute set outside Asian country, or a guarantee from a billboard class – I bank in an Asian country, if such a guarantee is issued against the counter-guarantee of a bank of international repute set outside Asian country, ought to be obtained from the overseas beneficiary.
  • In the case of a Public Sector Company or a Department/ endeavor of the government of India/ State Governments, approval from the Ministry of Finance, Government of Asian country for advance remittent for import of services while not bank guarantee for associate quantity exceptional USD one hundred,000 (USD 100 thousand) or its equivalent would be needed.
  • AD class – I banks ought to conjointly follow-up to make sure that the beneficiary of the advance remittent fulfills his obligation beneath the contract or agreement with the remitter in an Asian country, failing that, the quantity ought to be repatriated to the Asian country.
  • AD class – I banks ought to guarantee the generation of ORMs and marking off within the IDPMS etc., as per living IDPMS tips.

External Commercial Borrowing

External industrial borrowing (ECBs) square measure loans in Asian countries created by non-resident lenders in foreign currency to Indian borrowers. They’re used widely in Asian countries to facilitate access to foreign cash by Indian companies and PSUs (public sector undertakings). ECBs embody banking concern loans, buyers’ credit, suppliers’ credit, and securitized instruments like floating rate notes and glued rate bonds. External industrial Borrowing (ECB), because the expression hints, is that the loan/ debt/ borrowings taken by an associate eligible entity in Asian country for industrial purpose, outwardly i.e. from any recognized entity outside Asian country. However, these borrowings taken should make sure with the norms of the bank of Asian countries (RBI).

Advantages of ECBs

  • ECBs give chance to borrow a giant volume of funds
  • The funds square measure out there for comparatively future
  • Interest rate also is lower compared to domestic funds
  • ECBs square measure within the style of foreign currencies. Hence, they permit the company to own foreign currency to satisfy the import of machinery etc.
  • Corporate will raise ECBs from internationally recognized sources like banks, credit agencies, and international capital markets.

Export of goods and services

‘Export’ includes the taking or causation out of products by land, sea, or air, on consignment or by the approach of sale, lease, never-never, or beneath the other arrangement. Within the case of code, ‘export’ conjointly includes transmission through any electronic media. “All export contracts and invoices shall be dominated either in freely convertible currency or Indian rupees however export yield shall be complete in freely convertible currency. However, specific exports are also complete in rupees, provided it’s through a freely convertible Vostro account of a non-resident bank set in any country aside from a member country of Asian Clearing Union (ACU) or Nepal or Asian nation.” however rupee isn’t a freely convertible currency.

Manner of receipt and payment

i.          Full quantity of export worth shall be received through a billboard Bank within the manner such

ii.         Once payment for merchandise sold-out to overseas patrons throughout their visits is received during this manner, EDF (duplicate) ought to be discharged by the AD Category-I banks solely on receipt of funds in their Nostro account or if the AD Category-I banks involved isn’t the MasterCard sexual union bank, on the production of a certificate by the bourgeois from the Mastercard sexual union bank in the Asian country to the result that it’s received the equivalent quantity in interchange.

iii.        Process of export connected receipts through on-line Payment entranceway Service suppliers (OPGSPs)

iv.        Third-party payments for export/ import transactions

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Banking Professional with 16 Years of Experience. The idea to start this Blogging Site is to Create Awareness about the Banking and Financial Services.

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