The Reserve Bank of India (“RBI”) has delegated to the AD banks, power to deal with cases related to “set-off” of export receivables against import payables. This liberalization measure came through the A.P. (DIR Series) Circular No. 47, issued by the RBI on 17 November 2011. So far, such cases were considered directly by the RBI and now the AD banks may deal with such cases, subject to the following:
(a) The import is as per the ‘Foreign Trade Policy’ in force;
(b) invoices/ bills of lading/ airway bills and exchange control copies of bills of entry for home consumption have been submitted by the importer to the AD bank;
(c) payment for the import is still outstanding in the books of the importer,
(d) both the transactions of sale and purchase may be reported separately in ‘R’ returns (by the AD bank).
(e) the relative GR forms (exchange control declaration) will be released by the AD bank only after the entire export proceeds are adjusted / received.
(f) the “set-off” of export receivables against import payments should be in respect of the same overseas buyer and supplier and that consent for “set-off” has been obtained from him.
(g) the export / import transactions with ACU countries (Asian Clearing Union) should be kept outside the arrangement.
(h) all the relevant documents are submitted to the concerned AD bank who should comply with all the regulatory requirements relating to the transactions.