Banking process on Import of currencies not having direct exchange rates



According to Reserve Bank of India update as on 31st May, 2022, the directions on IMPORT OF CURRENCIES NOT HAVING DIRECT EXCHANGE RATE - DIRECTIONS FROM RBI IN INDIA is given below: 

C.16. Settlement of Import transactions in currencies not having a direct exchange rate

To further liberalize the procedure and facilitate settlement of import transactions where the invoicing is in a freely convertible currency and the settlement takes place in the currency of the beneficiary, which though convertible, does not have a direct exchange rate, it has been decided that AD Category-I banks may permit settlement of such import transactions (excluding those put through the ACU mechanism), subject to conditions as under:

  1. Importer shall be a customer of the AD Bank,
  2. Signed contract / invoice is in a freely convertible currency,
  3. The beneficiary is willing to receive the payment in the currency of beneficiary instead of the original (freely convertible) currency of the invoice/ contract, Letter of Credit as full and final settlement,
  4. AD bank is satisfied with the bonafides of the transactions, and
  5. The counterparty to the importer of the AD bank is not from a country or jurisdiction in the updated FATF Public Statement on High Risk & Non Co-operative Jurisdictions on which FATF has called for counter measures.

Banking regulations on Exports and Imports in India

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