What changed
RBI withdrew the earlier automatic caution-listing triggers under para 3(1)(i) and 3(1)(ii) of the 2016 circular. Now, caution-listing happens only on AD bank recommendations, considering the exporter's track record and adverse notices from agencies like ED, CBI, or DRI. De-caution-listing also requires AD bank recommendations.
What it means for you
Banks now have greater discretion and responsibility in managing exporter caution-listing. This shift reduces automatic penalties and allows banks to assess each exporter's situation, promoting fairness. However, banks must diligently monitor exporter compliance and coordinate with enforcement agencies to ensure timely recommendations.
What you must do
- Review and update internal procedures for caution-listing exporters in EDPMS to align with the new recommendation-based process.
- Train staff to identify exporters who come to adverse notice of ED, CBI, DRI, or other law enforcement agencies.
- Establish a clear process for making recommendations to the RBI Regional Office for both caution-listing and de-caution-listing.
- Communicate the revised procedure to all relevant constituents and update internal compliance manuals.
Who it affects
All Category-I Authorised Dealer Banks, Exporters using EDPMS, RBI Foreign Exchange Department Regional Offices
What triggered the change in caution-listing procedure?
RBI revisited the earlier automatic criteria to make the system more exporter-friendly and equitable, as per the Statement on Development and Regulatory Policies issued on October 9, 2020.
How should an AD bank recommend caution-listing now?
The AD bank must recommend caution-listing to the RBI Regional Office if the exporter is not traceable, not making sincere efforts to realize export proceeds, or has come to the adverse notice of enforcement agencies like ED, CBI, or DRI.
Are the procedural aspects for handling shipping documents of caution-listed exporters changed?
No, the procedural aspects outlined in Para 3.2 of the earlier circular remain unchanged.