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TMI BlogTrade Credit Policy – Revised frameworkX X X X Extracts X X X X X X X X Extracts X X X X ..... 17. The Trade Credit framework based on the aforementioned notified regulation is being issued now. Detailed instructions are set out in the Annex to this circular. 2. Trade Credits can be raised under the automatic route up to the amount specified in the Annex to this circular and in compliance with the other applicable norms. The designated AD Category I bank while considering the Trade Credit proposal is expected to ensure compliance with applicable Trade Credit guidelines by their constituents. Any contravention of the applicable provisions will invite penal action or adjudication under the Foreign Exchange Management Act, 1999. 3. The amended Trade Credit policy will come into force with immediate effect. Authorised Dealer ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uests to the Foreign Exchange Department, Central Office, Reserve Bank of India through their Authorised Dealer (AD) Banks for examination. 1.3. Automatic route: For the automatic route, the cases are examined by the Authorised Dealer Category-I banks. 1.4. Special Economic Zone Free Trade Warehousing Zone: They shall have the same meaning as assigned to them in Special Economic Zones Act 2005 as amended from time to time. Note: Other important terms like Authorised Dealer, Benchmark Rate and Foreign Equity Holder used in this circular shall have the same meaning as assigned to them in the New External Commercial Borrowings framework ( A. P. (DIR Series) Circular No. 17 dated January 16, 2019) . 2. Trade Credit Framew ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v Period of TC The period of TC, reckoned from the date of shipment, shall be up to three years for import of capital goods. For non-capital goods, this period shall be up to one year or the operating cycle whichever is less. For shipyards / shipbuilders, the period of TC for import of non-capital goods can be up to three years. vi All-in-cost ceiling per annum Benchmark rate plus 250 bps spread. vii Exchange rate Change of currency of FCY TC into INR TC can be at the exchange rate prevailing on the date of the agreement between the parties concerned for such change or at an exchange rate, which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... different SEZ including FTWZ subject to compliance with parameters given at paragraph 2 above. Further, an entity in DTA is also allowed to raise TC for purchase of capital / non-capital goods from a unit or a developer of a SEZ including FTWZ. 3.2. TC transactions in respect of SEZs and DTAs as permitted above should also be in compliance with applicable provisions of SEZ Act, 2005 as amended from time to time. For TC transactions related to SEZ, date of transfer of ownership of goods will be treated as TC date. As there will be no bill of entry for sale transactions within SEZ, the inter unit receipt generated through NSDL can be treated as an import document. 4. Security for trade credit: The provisions regarding security for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvocation, the total payments towards guarantee should not exceed the dues towards TC; and (v) Creation/ enforcement / invocation of charge shall be as per the provisions contained in Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2000 and Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 or any other relative Regulations framed under the Foreign Exchange Management Act, 1999 and should also comply with FDI/FII/SEZ policy/ rules/ guidelines. The directions on issuance of guarantee mentioned under this provision shall come into force from the date of publication, in the Official Gazette, of the relative Regulations issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consolidated statement, at quarterly intervals on the eXtensible Business Reporting Language (XBRL) platform. For the above purpose AD banks may login to the site https://secweb.rbi.org.in/orfsxbrl/ using their User name, Password and Bank code. For downloading the relevant form, AD banks may follow the link Download Returns Package and download the form. After following the successive steps, AD banks may upload the file. For User name and Password, AD banks may write by email along with contact details. Clarification required, if any, may also be sent to the aforesaid email of the Reserve Bank and/ or may be communicated at Telephone No. 022-22601000 (extension- 2715). Guide for using XBRL website is also available under the Help op ..... X X X X Extracts X X X X X X X X Extracts X X X X
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