What changed
The temporary relaxation allowing exporters 12 months (instead of 6 months) to realise and repatriate export proceeds, initially set to expire after one year, has been reviewed and extended up to March 31, 2011. No changes were made to the rules for SEZ units or exports to overseas warehouses.
What it means for you
Exporters get continued breathing room to bring back foreign exchange earnings, easing working capital pressure. Banks must update their internal systems and customer advisories to reflect the new deadline. The extension signals RBI's support for exporters amid global uncertainties, but the temporary nature means banks should prepare for a possible reversion to 6 months post-March 2011.
What you must do
- Update internal compliance calendars and customer communication templates to reflect the extended deadline of March 31, 2011.
- Advise all export clients about the continued 12-month realisation period and the unchanged rules for SEZ units and overseas warehouses.
- Monitor export bills and ensure timely follow-up for realisation within the extended period, while flagging any potential delays early.
- Prepare for a possible reversion to 6 months after March 2011 by reviewing export credit and forex risk management policies.
Who it affects
AD Category-I banks handling export bills, Exporters of goods and software, SEZ units (indirectly, as rules unchanged), Banks' trade finance and forex departments
Does this circular change the realisation period for SEZ units?
No, the provisions for SEZ units and exports to overseas warehouses remain unchanged as per earlier instructions.
What is the legal basis for this circular?
It is issued under sections 10(4) and 11(1) of FEMA, 1999, and does not override permissions required under other laws.
How should banks communicate this to customers?
AD Category-I banks must bring the circular's contents to the notice of their constituents and customers concerned.