“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 (AD) 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.
“It will help the gasping exporters also, some of which were classified as ‘risky exporters’ for purposes like GST, Customs, also, on the basis of various parameters, including EDPMS listing in caution list,” he said.
Industry body Ficci’s President Sangita Reddy said the decision to discontinue the automatic caution listing system will benefit the exporters as it was a long pending request of Ficci and “we are happy to see a positive move in this direction”.
After contracting for six months in a row, India’s exports grew by 5.27 per cent year-on-year to USD 27.4 billion in September while trade deficit narrowed to a three-month low of USD 2.91 billion. Imports declined by 19.6 per cent to USD 30.31 billion in September.