RBI Eases Advance Remittance Norms

Mumbai, Sept 18: | Updated: Sep 19 2003, 05:30am hrs
The Reserve Bank of India (RBI) has liberalised the procedure for advance remittance by authorised dealers (ADs) of over $100,000 or equivalent without bank guarantee for import of goods into India.

The apex bank said in a notification to ADs: If the amount of advance remittance exceeds $100,000 or its equivalent, an unconditional, irrevocable standby Letter of Credit (LoC) or a guarantee from international bank of repute situated outside India or a guarantee of an AD in India, if such guarantee is issued against the counter guarantee of an international bank of repute situated outside India, is to be obtained.

In cases where the importer (other than a public sector company or a department /undertaking of the Centre/state governments) is unable to obtain bank guarantee from overseas suppliers and the AD is satisfied about the track record and bonafides of the importer, the requirement of the bank guarantee/ standby LoC may not be insisted upon for advance remittances up to $1,000,000 (US dollar one million).

ADs were allowed frame their own internal guidelines to deal with such cases and the decision to waive requirement of bank guarantee should be taken by the banks board, RBI said.

In the case of a public sector company bank guarantee has been specifically waived by the Union Ministry of Finance, for advance remittances exceeding $100,000.