Reserve Bank of India vide its circular
RBI/2011-12/264 A.P. (DIR Series) Circular No. 47 dt. 17.11.2011
has delegated powers to AD-1 Category banks to accept applications from exporters to "Set Off" Export Receivables against Import Payables. Earlier this power was vested with RBI. This is a step towards liberalisation of Export - Import procedures.
The RBI cicurlar can be accessed at
Apart from various conditions the main conditions which need to be followed by importer / exporters are :
- All documents relating to the transactions (import / export) should be provided to the banker
- Returns in Form "R" seperately for Import and Export transactions should be provided to AD
- The "Set Off" will be against Imports & Exports which has been dealt with from the same overseas buyer and seller
- This facility will not be available from ACU countries namely - Bangladesh, Bhutan, Iran, Maldives, Myanmar, Nepal, Pakistan & Srilanka
This is quite a welcome step by RBI considering the volume of import / export transactions with a single entity. This will be a beneficial move especially for companies which have subsidiary abroad or is a subsidiary of a company situated abroad. This will not only help save transaction time but also transaction costs.
