The authorized dealer’s obligation in respect of Exchange Control regulations pertaining to Exports

The authorized dealer’s obligation in respect of Exchange Control regulations pertaining to the following: (a) Follow-up of overdue bills. (b) Countersignature on PP forms are discussed below:

The provisions of Exchange Control Manual on the issues are as follows:

(a) Follow-up of overdue bills

(i) Authorized dealers should closely watch realization of bills through Bills Register and, in cases where bills remain outstanding beyond the due date for payment, they should take up the matter promptly with exporter concerned. If exporter fails to arrange for delivery of the proceeds on the due date, the matter should be reported to Reserve Bank by letter stating, where possible, the reason for the delay in realization of proceeds of the exports unless exporter has sought permission for extension of time. The duplicate copies of GR/PP forms should, however, continue to be held by authorized dealer until full proceeds are realized except in the case of undrawn balances up to 10% which could not be repatriated despite best efforts by the exporter.

Authorized dealers should follow up export outstanding with exporters systematically and vigorously so that action against defaulting exporters does not get delayed. Any laxity noticed in the follow-up of realization of export proceeds by authorized dealers will be viewed seriously by Reserve Bank leading to the invocation of the provision in FERA 1971, authorizing it to impose penalty on an authorized dealer.

(ii) Authorized dealers should furnish to Reserve Bank half yearly a consolidated statement in form XOS giving details of all export bills outstanding beyond the period prescribed for realization as at the end of June and December every year. The statement should be submitted within fifteen days from the close of relevant half-year.

(b) Countersignature on PP forms

PP form will be presented by an exporter to an authorized dealer for countersignature. Authorized dealers should countersign PP forms after ensuring that the parcel is being addressed to their branch or correspondent bank in the country of import. The concerned overseas branch or correspondent should be instructed to deliver the parcel to consignee against payment or acceptance of the relative bill. Authorized dealers may, however, countersign PP forms covering parcels addressed direct to the consignees, provided:

(i) an irrevocable letter of credit for the full value of the export has been opened in favor of exporter and has been advised through authorized dealer concerned: or (is) the full value of the shipment has been received in advance by the exporter through an authorized dealer: or

(iii) the authorized dealer is satisfied, on the basis of the standing and track record of the exporter and the arrangement made for realization of the export proceeds, that he could do so.

In such cases, particulars of advance payment/letter of credit/authorized dealer’s certificates of standing etc., of the exporter should be furnished on the form under proper authentication. Any alteration in the name and address of the consignee on  the PP form should also be authenticated by the authorized dealer under his stamp and signature.