What changed
The realisation and repatriation period for export proceeds has been extended from six months to twelve months for 100% Export Oriented Units and units under EHTP, STP, and BTP schemes. This change applies to exports made on or after September 1, 2004, following the government's Foreign Trade Policy announcement in September 2004.
What it means for you
Banks can now allow these eligible units up to twelve months to bring back export proceeds, reducing compliance pressure and potential defaults. The relaxation supports export-oriented sectors by providing more working capital flexibility, but AD banks must ensure existing EEFC account rules continue to apply without change.
What you must do
- Update internal systems to reflect the extended 12-month realisation period for eligible units.
- Inform all constituents and customers about the new timeline for exports from September 1, 2004.
- Continue applying existing EEFC credit guidelines for these units without modification.
- Ensure compliance with FEMA provisions under Sections 10(4) and 11(1) while implementing this relaxation.
Who it affects
Authorised Dealer banks handling export transactions, 100% Export Oriented Units (EOUs), Units under Electronics Hardware Technology Parks (EHTPs), Units under Software Technology Parks (STPs), Units under Bio-Technology Parks (BTPs)
Does this circular apply to exports made before September 1, 2004?
No, the relaxation is only for exports made on or after September 1, 2004. Earlier exports continue to follow the six-month realisation period.
Are EEFC account rules changed for these units?
No, the existing guidelines for 100% credit of foreign exchange earnings to EEFC accounts remain unchanged as per the circular.
Which legal provisions empower this circular?
The circular is issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999, and is without prejudice to other permissions or approvals required under any other law.