Bank conditions on advance payment against Import of Rough Diamonds in India

How does importer bank account payments for import of rough Diamonds?

According to Reserve Bank of India update as on 31st May, 2022, the directions on RBI guidelines to account Advance Remittance for Import of Rough Diamonds is given below: 

C.1.2.Advance Remittance for Import of Rough Diamonds

a) AD category  – I banks are permitted to take decision on overseas mining companies to whom an importer (other than Public Sector Company or Department / Undertaking of Government of India / State Government) can make advance payments, without any limit / bank guarantee/ stand-by letter of Credit. Banks must ensure the following:

i. The overseas mining company should have the recommendation of GJEPC.

ii. The importer should be a recognised processor of rough diamonds and should have a good track record.

iii. AD Category - I banks should, undertake the transaction based on their commercial judgment and after being satisfied about the bonafides of the transaction.

iv. Advance payments should be made strictly as per the terms of the sale contract and should be made directly to the account of the company concerned, that is, to the ultimate beneficiary and not through numbered accounts or otherwise and AD banks should ensure that they have created the Outward Remittance Message (ORM) for all such outward remittances in IDPMS.

v. Further, due caution may be exercised to ensure that remittance is not permitted for import of conflict diamonds (Kimberly Certification).

vi. KYC and due diligence exercise should be done by the AD Category - I banks as per the existing guidelines.

vii. AD Category - I banks should follow-up submission of the Bill of Entry / documents evidencing import of rough diamonds into the country by the importer, in terms of the Act / Rules / Regulations / Directions issued in this regard.

b) In case of an importer entity in the Public Sector or a Department / Undertaking of the Government of India / State Government/s, AD Category - I banks may permit the advance remittance subject to the above conditions and a specific waiver of bank guarantee from the Ministry of Finance, Government of India, where the advance payments is equivalent to or exceeds USD 100,000/- (USD one hundred thousand only).

viii. Based on the AD code declared by the importer, the banks shall download the Bill of Entry (BOE) issued by EDI ports from “BOE Master” in IDPMS. For non-EDI ports, AD banks of the importer shall upload the BoE data in IDPMS as per message format “Manual BoE reporting” on daily basis on receipt of BoE from the customer/Customs Office.

ix. AD banks will enter BOE details  and mark off ORMs as per the message format “BOE Settlement”

x. In case of payment after receipt of BoE, the AD bank shall generate ORM for import payments made by the importer customer as per the message format “BOE Settlement”

xi. Multiple ORMs can be settled against single BoE and also multiple BoEs can be settled against one ORM.

Bank directions to be read by each Importer in India

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