What changed
Previously, post-shipment rupee export credit could only be liquidated by export bill proceeds, EEFC balances, or unfinanced collection bills. Now, exporters with overdue export bills may also extinguish this credit from their rupee resources, reducing their interest burden.
What it means for you
Banks can now accept rupee repayments for overdue post-shipment export credit, lowering exporters' interest costs. However, the GR form stays outstanding and the amount appears in the XOS statement, meaning the exporter's realisation liability continues. Banks must track this carefully to ensure eventual export proceeds come in.
What you must do
- Update your internal policies to allow rupee repayment of overdue post-shipment export credit as per this circular.
- Ensure that when such repayments are accepted, the GR form remains outstanding and the amount is reported in the XOS statement.
- Monitor the exporter's realisation liability until the export bill is actually realised, even after rupee repayment.
- Communicate this new option to your export credit customers to help them reduce interest costs.
Who it affects
Scheduled Commercial Banks (excluding RRBs) handling export credit, Exporters with overdue post-shipment rupee export credit
Can an exporter repay overdue post-shipment credit from any rupee account?
Yes, as per this circular, exporters with overdue export bills may extinguish their overdue post-shipment rupee export credit from their rupee resources, subject to mutual agreement with the bank.
Does repaying from rupee resources clear the export obligation?
No. The GR form remains outstanding and the amount is shown in the XOS statement. The exporter's liability for realisation continues until the export bill is actually realised.
What was the earlier rule for liquidating post-shipment credit?
Earlier, post-shipment credit could only be liquidated by proceeds of export bills, EEFC balances, or proceeds from unfinanced collection bills. Rupee repayment was not an option for overdue bills.