What changed
The earlier relaxation allowing exporters 12 months (instead of 6) to realise and repatriate export proceeds was set to expire on March 31, 2011. RBI, in consultation with the government, has now extended this relaxation up to September 30, 2011, subject to further review. No changes have been made for SEZ units or exports to overseas warehouses.
What it means for you
Banks must continue to allow exporters the extended 12-month window for realisation of export proceeds, reducing immediate compliance pressure. This extension provides exporters additional working capital flexibility, especially in a challenging global trade environment. AD banks should update their internal systems and customer advisories to reflect the new deadline.
What you must do
- Update internal systems to reflect the extended relaxation period up to September 30, 2011.
- Advise all export customers about the continued 12-month realisation window.
- Ensure no change in treatment for SEZ units or warehouse exports—they remain under existing rules.
- Monitor the review clause and prepare for possible further extensions or reversion to 6 months.
Who it affects
All Category-I Authorised Dealer banks, Exporters of goods and software, Exporters in Special Economic Zones (SEZs) – no change, Exporters using overseas warehouses – no change
What is the new deadline for the extended export realisation period?
The relaxation allowing 12 months for realisation of export proceeds is now extended up to September 30, 2011, subject to review.
Does this circular change rules for SEZ units or warehouse exports?
No, the provisions for SEZ units and exports to warehouses outside India remain unchanged.
What legal authority does this circular have?
It is issued under sections 10(4) and 11(1) of FEMA, 1999, and does not override other permissions or approvals required under any other law.