Bank guidelines for writing off of export bills in India

Posted on 10 April 2023 Category : For Beginners

Indian Union Budget 2016-17, Budget speech pdf . Click here to read

Write off of Export bills, RBI guidelines

An exporter who has not been able to realize the outstanding export dues despite best efforts may either self-write off or approach the banks, who had handled the relevant shipping documents, with appropriate supporting documentary evidence with a request for write off of the unrealized portion subject to the fulfillment of stipulations and conditions. The limits prescribed for “write-offs” of unrealized export bills are as under:

Self “write-off” by an exporter (Other than Status Holder Exporter) :5% of the total export proceeds realized during the previous calendar year.

Self “write-off” by Status Holder Exporters :10% of the total export proceeds realized during the previous calendar year.

‘Write-off” by Authorized Dealer Bank :10% of the total export proceeds realized during the previous calendar year.

Write off in cases of Payment of claims by ECGC and private insurance companies regulated by Insurance Regulatory and Development Authority:

Banks shall, on an application received from the exporter supported by documentary evidence from the ECGC and private insurance companies regulated by IRDA confirming that the claim in respect of the outstanding bills has been settled by them, write off the relative export bills and delete them from the XOS statement. Such write-off will not be restricted to the limit of 10 per cent indicated above. Surrender of incentives, if any, in such cases will be as provided in the Foreign Trade Policy. The claims settled in rupees by ECGC and private insurance companies regulated by IRDA should not be construed as export realization in foreign exchange.

Write-off – Relaxation:

As announced in the Foreign Trade Policy, with effect from August 27, 2009, realisation of export proceeds shall not be insisted upon under any of the Export Promotion Schemes under the said FTP, subject to the following conditions:

(a) The write off on the basis of merits is allowed by the Reserve Bank or by bank on behalf of the Reserve Bank, as per extant guidelines;

(b) The exporter produces a certificate from the Foreign Mission of India concerned, about the fact of non-recovery of export proceeds from the buyer; and

(d) The banks are advised not to insist on the surrender of proportionate export incentives, other than under the Duty Drawback Scheme, if availed of, by the exporter under any of the Export Promotion Schemes under FTP 2009-14, subject to fulfilment of conditions as stated above. The drawback amount has to be recovered even if the claim is settled by the Export Credit Guarantee Corporation of India Limited (ECGC) or the write –off is allowed by the Reserve Bank.

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