The Reserve Bank of India on Friday announced discontinuing the system-based automatic caution-listing of exporters, a move aimed at providing flexibility to exporters in terms of realisation of export proceeds.
Exports have been adversely impacted by the pandemic-related contraction in external demand, RBI Governor Shaktikanta Das said during a virtual press conference after the meeting of the Monetary Policy Committee. “In this environment, it is crucial to provide flexibility to exporters in the realisation of export proceeds and to empower them to negotiate better terms with overseas buyers,” he said.
As part of automation of Export Data Processing and Monitoring System (EDPMS), the ‘Caution/ De-caution Listing’ of exporters was automated in 2016.
Accordingly, the exporters were to be caution-listed automatically, if any shipping bill against them remained outstanding for more than two years in EDPMS and no extension was granted for realisation of export proceeds against the outstanding shipping bill.
Additionally, the normal system of caution-listing based on the recommendations of the Authorised Dealer bank before the expiry of two years is there for certain cases.
“In order to make the system more exporter friendly and equitable, it has been decided to discontinue the Automatic Caution-listing,” the governor said.
However, RBI will continue with caution-listing based on the case-specific recommendations of the AD bank. Commenting on RBI’s decision, Vivek Jalan, Partner, Tax Connect Advisory Services, said the move will provide much needed relief to exporters as it will ensure better and timely credit flow to exporters.