 "Chatroom: Remittances below $25,000 also need Form A2 now")
I have been making outward remittances to my son studying abroad for his maintenance through my bank. They used to only ask for a simple request letter stating the purpose of remittance. Now, I am told that I have to submit a form A2 every time I want to make a remittance. Is this correct? Yes. The RBI had allowed the banks to release foreign exchange for any current account transaction, on the basis of a simple letter containing basic information and subject to an upper limit of $25,000 or its equivalent.
Banks were not required to obtain any other documents, including Form A2. The latest AP (DIR) Circular no.13 dated July 5, 2024 says that the banks must obtain Form A2 in physical or digital form for all cross-border remittances irrespective of the value of transaction.
Banks were not required to obtain any other documents, including Form A2. The latest AP (DIR) Circular no.13 dated July 5, 2024 says that the banks must obtain Form A2 in physical or digital form for all cross-border remittances irrespective of the value of transaction.
We refer to the draft directions to Authorised Dealers on export and import of goods and services put up by the RBI on its website on July 2, 2024. I do not see any specific instructions for grant of write-off in those instructions, whereas in the current Master Direction no.16/2015-16 dated January 1, 2016 (as amended), there are detailed instructions of grant of write-off. In fact, the draft directions do not deal with export claims, refund of export proceeds, agency commission on exports or even surrender of proportionate export incentives when there is shortfall in realisation of export proceeds. As exporters, we need clarity on all these matters and so would appreciate your views on the same.
The RBI has only put up the draft directions on exports and imports of goods and services for public response. The directions would be finalised only after receiving feedback from exporters, importers, banks and other stakeholders. So, you can also give your feedback via email to RBI by September 01, 2024, with the subject line “Feedback on draft regulations and directions on export and import under FEMA”.
Now, at Para 3.5 of the draft directions, the RBI does say that AD banks, on request of the exporter, may permit reduction in the full export value after satisfying themselves of the bona fides of such requests. And at Para 4.1 of the draft directions, the RBI does say that AD banks shall put in place a comprehensive, well-documented policy as approved by their Board of Directors within six months of issuance of this circular for handling payment transactions related to export/import of goods and services and merchanting trade. So, it appears the RBI has left it to the judgment of the banks on how to deal with requests for write-offs, export claims etc. For banks, so used to only implementing RBI directions on exports and imports, it is unchartered territory. So, we have to wait and see how they respond. For exporters and importers also, a situation where different banks act differently, instead of everyone following the same RBI instructions will be a new experience. We have to wait and see.
Business Standard invites readers' SME queries related to GST, export and import matters. You can write to us at smechat@bsmail.in
Now, at Para 3.5 of the draft directions, the RBI does say that AD banks, on request of the exporter, may permit reduction in the full export value after satisfying themselves of the bona fides of such requests. And at Para 4.1 of the draft directions, the RBI does say that AD banks shall put in place a comprehensive, well-documented policy as approved by their Board of Directors within six months of issuance of this circular for handling payment transactions related to export/import of goods and services and merchanting trade. So, it appears the RBI has left it to the judgment of the banks on how to deal with requests for write-offs, export claims etc. For banks, so used to only implementing RBI directions on exports and imports, it is unchartered territory. So, we have to wait and see how they respond. For exporters and importers also, a situation where different banks act differently, instead of everyone following the same RBI instructions will be a new experience. We have to wait and see.
Business Standard invites readers' SME queries related to GST, export and import matters. You can write to us at smechat@bsmail.in