• Firm irrevocable supply orders should be in place. The contract with the overseas party /buyer should be vetted and clearly specify the nature, amount and delivery timelines of products over the years and penalty in case of non-performance or contract cancellation. Product pricing should be in consonance with prevailing international prices.
• Company should have capacity, systems and processes in place to ensure that the orders over the duration of the said tenure can actually be executed.
• The facility is to be provided only to those entities, who have not come under the adverse notice of Enforcement Directorate or any such regulatory agency or have not been caution listed.
• Such advances should be adjusted through future exports.
• The rate of interest payable, if any, should not exceed LlBOR plus 200 basis points.
• The documents should be routed through one Authorized Dealer bank only.
• Authorised Dealer bank should ensure compliance with AML / KYC guidelines and also undertake due diligence for the overseas buyer so as to ensure it has good standing / sound track record.
• Such export advances shall not be permitted to be used to liquidate Rupee loans, which are classified as NPA as per the Reserve Bank of India asset classification norms.
• Double financing for working capital for execution of export orders should be avoided.
• Receipt of such advance of USD 100 million  or more should be immediately reported to the Trade Division, Foreign Exchange Department, Reserve Bank of India, Central Office, 5th Floor, Amar Building, Mumbai under copy to the concerned Regional Office of the Reserve Bank of India as per the format given in Annex – I.

• Issuance  of  BG  /  SBLC,  being  a  non-funded  exposure,  should  be rigorously  evaluated  as  any  other  credit  proposal  keeping  in  view,among others, prudential requirements based on board approved policy.Such  facility  will  be  extended  only  for  guaranteeing  export performance.
• BG / SBLC may be issued for a term not exceeding two years at a time and further rollover of not more than two years at a time may be allowed subject to satisfaction with relative export performance as per the contract.
• BG / SBLC should cover only the advance on reducing balance basis.
• BG / SBLC issued from India in favour of overseas buyer should not be discounted by the overseas branch / subsidiary of bank in India.
• Authorised Dealer bank should duly evaluate and monitor the progress made by the exporter on utilisation of the advance and submit an Annual Progress Report to the Trade Division, Foreign Exchange Department, Reserve Bank of India, Central Office, 5th Floor, Amar Building, Mumbai under copy to the concerned Regional Office of the Reserve Bank of India in format as per Annex - II within a month from the close of each financial year.

4.AD Category - I banks may bring the contents of this circular to the notice of their constituents and customers concerned.

5.The directions contained in this circular have been issued under Sections 10(4) and 11 (1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions I
approvals, if any, required under any law.


Yours faithfully,
(C D Srinivasan)
Chief General Manager

ITNS 281 Challan is used for TDS / TCS Payments. Fill the challan and submit the challan with check to your bank. after payments process completed, get the Receipt from your bank. Normally you will get receipt within 1-3 working days.(If you submit other bank cheque, you will get the receipt within 3-5 Working day). some bank give the receipt immediately. This receipt is useful when you submit the TDS / TCS Returns.