Write-off of Export Bills Settled by IRDA-Registered Insurers
Current · Source: Reserve Bank of India · RBI/2007-08/353 · issued 03 Jun 2008 · ~1 min read
Quick answerAD Category-I banks can now write off export bills settled by any IRDA-registered insurance company, not just ECGC. This liberalisation removes the earlier 10% write-off limit and requires documentary evidence of claim settlement and surrender of export incentives.
The rule, in the simplest words
Banks can now remove export bills from their XOS (list of unpaid export bills) if any IRDA-registered insurance company (not just ECGC) has paid the claim.
There is no 10% limit anymore on how many bills can be written off this way.
Before writing off, banks must get proof from the insurance company that the claim was paid and that the exporter gave up any export bonuses or rewards.
The claim money paid in rupees must not be counted as foreign currency earnings, and cannot be put into an EEFC (special foreign currency savings account).
How it plays out — a real example
A branch operations officer in Mumbai receives a request from an exporter whose shipment was insured by a private IRDA-registered insurer. The officer checks the insurer's settlement letter and the exporter's surrender of export incentives, then writes off the bill from the XOS statement—no longer needing ECGC approval or worrying about the old 10% cap. This clears the exporter's record and reduces the bank's reporting burden.
What changed
Previously, only ECGC-settled claims could be written off from the XOS statement. Now, claims settled by any insurance company regulated by IRDA are also eligible for write-off. The earlier 10% cap on such write-offs has been removed.
What it means for you
Banks can now clean up their XOS statements more comprehensively, reducing regulatory reporting burden. Exporters get faster closure on outstanding bills, improving their working capital cycle. However, claim amounts in rupees must not be treated as export realisation in foreign exchange or credited to EEFC accounts.
What you must do
Update internal write-off policies to include claims from all IRDA-registered insurers, not just ECGC.
Verify documentary evidence from the insurer confirming claim settlement and surrender of export incentives before processing write-off.
Ensure claim amounts in rupees are not credited to EEFC accounts or treated as foreign exchange realisation.
Communicate the revised procedure to exporter customers and relevant branches.
Who it affects
AD Category-I banks, Exporters with outstanding export bills, Insurance companies regulated by IRDA, ECGC
❓ Common questions
Does this circular remove the 10% write-off limit mentioned in earlier circulars?
Yes, paragraph 3 explicitly states that the write-off under this facility will not be restricted to the 10% limit indicated in paragraph C 18(b) of A.P. (DIR Series) Circular No.12 dated September 9, 2000.
Can the claim amount in rupees be credited to the exporter's EEFC account?
No. Paragraph 4 clarifies that claims settled in rupees by ECGC or insurance companies should not be construed as export realisation in foreign exchange and should not be credited to an Exchange Earners' Foreign Currency Account.
📜 Read the original circular — full text as issued by RBI
RBI/2007-08/353
A.P. (DIR Series) Circular No. 49
June 03, 2008
To,
All Authorised Dealer Category - I banks
Madam / Sir,
Export of Goods and Services -
Payments of Claims by Insurance Companies-Write off
Attention of Authorised Dealer (Category – I) banks is invited to A. P. (DIR Series) Circular No.22 dated September 24, 2003 , in terms of which AD banks were permitted to write off the export bills and delete them from the XOS statement in respect of outstanding export bills where claims were settled by ECGC.
2. Reserve Bank has received representations from Exporters / Trade bodies for extending the 'write off' facility applicable to the claims settled by all insurance companies which are registered with Insurance Regulatory and Development Authority (IRDA). In view of the representations received and in order to liberalise further the procedures, it has been announced in the Annual Policy Statement for the Year 2008-09 (para 133), to permit AD Category – I banks to write off, in addition to the claims settled by ECGC, the outstanding export bills settled by other insurance companies which are regulated by IRDA.
3. Accordingly, AD Category – I banks shall henceforth, on an application received from the exporter, supported by a documentary evidence from ECGC / insurance companies registered with IRDA, confirming that the claim in respect of the outstanding export bills has been settled and that the export incentives, if any, have been surrendered, write-off the relative export bills and delete them from the XOS statement. Such write-off will not be restricted to the limit of 10 per cent indicated in paragraph C 18(b) of the A. P. (DIR Series) Circular No.12 dated September 9, 2000.
4. It is clarified that the claims settled in Rupees by ECGC / insurance companies should not be construed as export realisation in foreign exchange and claim amount should not be allowed to be credited to Exchange Earners' Foreign Currency Account maintained in terms of Regulation 4 of FEMA Notification No.FEMA 10/2000-RB dated May 3, 2000 .
5. AD Category - I banks may bring the contents of this circular to the notice of their constituents and customers concerned.
6. The directions contained in this circular have been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.
Yours faithfully,
(Salim Gangadharan)
Chief General Manager- in- Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2007-08/353 · issued 03 Jun 2008. The plain-English explanation above is BankPulse’s own independent summary.
Communicate the revised procedure to exporter customers and relevant branches.
⚙️ Operations
Verify documentary evidence from the insurer confirming claim settlement and surrender of export incentives before processing write-off.
📜 Compliance
Update internal write-off policies to include claims from all IRDA-registered insurers, not just ECGC.
Ensure claim amounts in rupees are not credited to EEFC accounts or treated as foreign exchange realisation.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are a Compliance officer at a bank this circular applies to (AD Category-I banks, Exporters with outstanding export bills, Insurance companies regulated by IRDA, ECGC), your first concrete step on “Write-off of Export Bills Settled by IRDA-Registered Insurers” is: “Update internal write-off policies to include claims from all IRDA-registered insurers, not just ECGC.” (RBI issued this 03 Jun 2008).
Circular: RBI/2007-08/353 -- Write-off of Export Bills Settled by IRDA-Registered Insurers
Issued: 03 Jun 2008
Action required: Update internal write-off policies to include claims from all IRDA-registered insurers, not just ECGC.
Action required: Verify documentary evidence from the insurer confirming claim settlement and surrender of export incentives before processing write-off.
Action required: Ensure claim amounts in rupees are not credited to EEFC accounts or treated as foreign exchange realisation.
Action required: Communicate the revised procedure to exporter customers and relevant branches.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
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BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=4219&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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