What changed
The realisation and repatriation period for full export value of goods or software exported has been extended from six months to twelve months from the date of export. This change was announced in the Annual Policy Statement for 2008-09 and is subject to review after one year. The existing provisions for SEZ units and exports to overseas warehouses remain unchanged.
What it means for you
Banks must update their export credit and forex monitoring systems to allow up to 12 months for export proceeds realisation instead of the earlier 6-month window. This gives exporters more breathing room amid external headwinds, reducing pressure on working capital and potential defaults on export credit. AD Category-I banks need to inform all constituents and ensure compliance with FEMA regulations.
What you must do
- Update internal systems and processes to reflect the extended 12-month realisation period for export proceeds.
- Communicate the change to all exporter customers and trade bodies through circulars or notices.
- Monitor export transactions to ensure compliance with the revised timeline and flag any deviations.
- Prepare for the review after one year by tracking data on realisation patterns.
Who it affects
AD Category-I banks, Exporters of goods and software, Trade bodies and export associations, Units in Special Economic Zones (SEZs) – unchanged provisions
Does this extension apply to SEZ units and exports to overseas warehouses?
No, the existing provisions for SEZ units and exports to warehouses established abroad with RBI permission remain unchanged.
When does this change take effect?
The circular was issued on June 3, 2008, and the extension is effective from that date, as announced in the Annual Policy Statement for 2008-09.
Is this extension permanent?
No, it is subject to review after one year, meaning the RBI may revert to the 6-month period or make further changes based on the review.