IMPORT OF CURRENCIES NOT HAVING DIRECT EXCHANGE RATE - DIRECTIONS FROM RBI IN INDIA
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:
- Importer shall be a customer of the AD Bank,
- Signed contract / invoice is in a freely convertible currency,
- 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,
- AD bank is satisfied with the bonafides of the transactions, and
- 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.
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