Directorate General of Foreign Trade (DGFT) on March 12, 2015 reduced mandatory documents for Import and Export of goods to below 3 documents:
Continue reading Revised Mandatory Documents for Import & Export
Tag Archives: Reserve Bank of India
Can Exporter Retain EEFC A/c Balance for Buyers Credit Repayment
Trigger for this topic is a question that a reader asked:
“Can Exporter retain dollar in EEFC A/c for buyers credit repayment ?”
Below article gives basic details about EEFC account and revert to above query.
Continue reading Can Exporter Retain EEFC A/c Balance for Buyers Credit Repayment
Buyers Credit on Import of Non Capital Goods
The trigger for this topic is a question that a reader asked:
We have a processing facility of granite. Can we use buyers credit for consumables (our banker refusing for consumables). As per them only raw material is allowed for buyer credit
Continue reading Buyers Credit on Import of Non Capital Goods
Relevance of Operating Cycle in Buyers Credit Transaction
Incase of raw material imports, RBI had delegated approving powers to Authorised Dealers (Banks) for Trade Credit (Buyers Credit / Suppliers Credit) for a tenure upto 1 year from the date of shipment. Bank’s based on internal policies decided customerwise tenure. Because of variation in policies between banks, few importers used buyers credit for arbitrage.
Continue reading Relevance of Operating Cycle in Buyers Credit Transaction
Revised Guidelines for Merchanting / Intermediary Trade
Further to article published below, RBI received suggestion from merchanting traders and trade bodies, based on which guidelines on merchanting trade transactions have been further reviewed on 28th March 2014 and with effect from 17th January 2014. Summary of the changes are given below.
Continue reading Revised Guidelines for Merchanting / Intermediary Trade
Permitted Methods of Import Payment
The trigger for this topic is a question that a reader asked:
Since Foreign Trade Policy allows imports in INR (Indian Rupees) also, what are the regulations related to buyer’s credit in respect of an import invoice which is in INR ?
Above question is more of an academic question as INR denominated import transaction are very limited but it will help in throwing light on concept of permitted methods of import payment.
Buyers Credit on Import of Second Hand Machinery
The trigger for this topic is a question that a reader asked:
Question : What are the RBI guidelines for availing Letter of credit facility and/or buyers credit facility for the import of second hand capital goods? Is it possible for a company to avail these facilities for second hand machinery?
Continue reading Buyers Credit on Import of Second Hand Machinery
Five Years of Leading the RBI – Looking Ahead by Looking Back
On 29 August 2013 Dr. D Subbarao Governor, Reserve Bank of India delivered the attached speech on occasion of Tenth Nani A. Palkhivala Memorial Lecture at Mumbai.
It is a candid speech with lot of insights.
Speech: Five Years of Leading the RBI – Looking Ahead by Looking Back
Buyers Credit on Import of Precious and Semi Precious Stone
In earlier articles, we had seen that, banks are permitted by RBI to approve Suppliers’ and Buyers’ Credit (Trade Credit) including the usance period of Letters of Credit opened for Import of gold in any form including jewelery made of gold/ precious metal and or studded with diamonds /semi precious /precious stone not exceeding 90 days from the date of shipment.
Continue reading Buyers Credit on Import of Precious and Semi Precious Stone
Prepayment of Buyers Credit
From Importer’s Perspective
There are various reasons because of which an importer would like to make a pre-payment of buyers credit. Such as:
- USD-INR rate in favour of importer post buyers credit is taken.
- Buyers credit is taken by way of keeping Fixed deposit as security and now importer wishes to free cash.
- Importer wishes to free Non Funds based limits for other use.
- Any other such reasons.
Comprehensive Guidelines on Foreign Exchange Derivatives
RBI via circular dated 28/12/2010 revised the extant guidelines on OTC (Over the Counter) Foreign Exchange Derivatives and which became effective from 1st February 2011. Below is the extract of the guidelines related to importers and exporters.
Continue reading Comprehensive Guidelines on Foreign Exchange Derivatives
RBI Increase Buyers Credit All-in-Cost Ceiling
RBI reviewing the developments in global finance markets and the fact that domestic importers are experiencing difficulties in raising Trade Credit (Buyers Credit / Suppliers Credit) within the existing all-in-cost ceiling, RBI has made below changes in the existing policy.
Continue reading RBI Increase Buyers Credit All-in-Cost Ceiling
Infrastructure Companies – Bridge Finance before availing ECB
Considering the specific needs of the Infrastructure sector, RBI under its circular External Commercial Borrowing (ECB) – Bridge Finance for Infrastructure Dated 23-09-2011, reviewed the ECB policy. An amendment was made in this policy on 21-09-2012. Brief summary is given below:
Continue reading Infrastructure Companies – Bridge Finance before availing ECB
Buyers Credit – Meaning, Process, Cost & Regulations
Buyer’s Credit refers to loans for payment of imports into India arranged by the importer from a bank or financial institutions outside India. Based on letter of undertaking of Importer’s bank, Overseas bank credits the Nostro of the importer’s bank which in turn uses the funds to make payment to the Suppliers bank against the import bill.
Continue reading Buyers Credit – Meaning, Process, Cost & Regulations
Buyer's Credit & Supplier's Credit 