Applicable Act / Rule: Foreign Exchange Management Act, 1999
The Reserve Bank of India has updated the Frequently Asked Questions on External Commercial Borrowings (ECB) and Trade Credits. The FAQs clarify operational aspects relating to issuance of Standby Letters of Credit (SBLC) and reporting requirements for settlement of delayed import dues. These clarifications apply to Authorised Dealer (AD) banks handling trade credit transactions.
FAQ 44:
“AD banks can issue SBLC on behalf of their customers for availing short term trade credit from overseas lenders in foreign currency subject to such SBLCs complying with the provisions contained in Department of Banking Regulation Master Circular No. DBR. No. Dir. BC.11/13.03.00/2015-16 dated July 1, 2015 on “Guarantees and Co-acceptances”, as amended from time to time.”
FAQ 45:
“AD banks are required to report all permissions granted by the AD banks/Regional offices of Reserve Bank for settlement of delayed import dues irrespective of the tenures of extension sought.”
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