A.D.(M.A. Series) Circular No.36 September 30, 1998
RESERVE BANK OF INDIA
EXCHANGE CONTROL DEPARTMENT
CENTRAL OFFICE
MUMBAI 400 001


To,

All Authorised Dealers in Foreign Exchange

Dear Sir,

Methods of Payment for Exports - Use of International Credit Cards(ICCs)

In terms of paragraph 6A.6 read with paragraph 2.5 of the Exchange Control Manual (ECM), authorised dealers have been advised the permitted methods for receipt of remittances against payment for exports from India. Keeping in view the increasing use of International Credit Cards (ICCs) in business and trade, it has been decided that payment received by exporters from their overseas buyers against ICCs may be treated as an approved method for receipt of exports proceeds. Accordingly, it will be in order for authorised dealers to handle documents in cases where the exporter has received the export proceeds in respect of goods sold to overseas buyers during their visits to India in rupees from the Credit Card Servicing banks either by way of reimbursement against charge slips signed by the ICC holders (overseas buyers) or as instantaneous credit to his bank account in India. In such cases the GR (Duplicate) should be released by the authorised dealer on receipt of funds in its Nostro account or on production of a certificate by the exporter from the Credit Card Servicing bank in India to the effect that it has received the equivalent amount in foreign exchange, if the authorised dealer concerned is not the Credit Card Servicing bank.

2. The following consequential amendment may be carried out in the Exchange Control Manual (Volume I).

The existing paragraph 6A.6 may be replaced by the attached Slip. 1

3. Authorised dealers may bring the contents of this circular to the notice of their constituents concerned.

4. The directions contained in this circular have been issued under Section 73(3) of the Foreign Exchange Regulation Act, 1973 (46 of 1973) and any contravention or non-observance thereof is subject to the penalties prescribed under the Act.

Yours faithfully,

KHIZER AHMED

Chief General Manager

Slip

[AD/MA 36/1998]

Methods of Payment

Methods of PaymentÜ

6A.6 (i) The method for receipt of payment for exports are given in Chapter 2. Normally, payment must be received through the medium of an authorised dealer. It will, however, be in order for authorised dealers to handle documents in cases where the exporter has received export proceeds directly from the overseas buyer in the form of bank draft, pay order, banker's cheque, personal cheque, foreign currency notes, foreign currency travellers' cheques etc., without any monetary limit provided the exporter's track record is good, he is a customer of the concerned authorised dealer and prima facie the instrument represents payment for exports.

(ii) It will also be in order for authorised dealers to handle documents in cases were the exporter has received the export proceeds in respect of goods sold to overseas buyers during their visits to India in rupees from the Credit Card Servicing banks either by way of reimbursement against charge slips signed by ICC holders (overseas buyers) or as instantaneous credit to his bank account in India. GR (duplicate) should be released by the authorised dealers on receipt of funds in their Nostro account or on production of a certificate by the exporter from the Credit Card Servicing bank in India to the effect that it has received the equivalent amount in foreign exchange , if the authorised dealer concerned is not the Credit Card Servcing bank.

(ii) Payment towards export proceeds out of funds held in the Foreign Currency (Non-resident) account and Non-resident (External) Rupee account is also permitted.

(iii) Payment towards export proceeds from a rupee account, held in the name of an Exchange House with an authorised dealer, is also permissible up to Rs.50,000 per transaction.

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