Relief on way for exporters facing banking hurdle

The department of commerce and financial services have decided to set up a joint task force to solve problem of third party payments.

Published: 16th June 2017 03:18 PM  |   Last Updated: 16th June 2017 03:18 PM   |  A+A-

Image for representational purpose only.


NEW DELHI: Exporters up against banking issues such as third-party payments can expect relief as the departments of commerce and financial services have decided to set up a joint task force to resolve those problems.

Earlier this week, Commerce Secretary Rita Teaotia discussed the matter with the Department of Financial Services and the RBI.

Exporters of goods especially to countries like Iran, Sudan, Zimbabwe, Iraq, Iran and Congo face such banking bottlenecks.

The other talking points include RBI's caution list of exporters, reluctance of banks to issue electronic bank realisation certificates (e-BRCs) for payments made by buyers through online gateway service providers and national electronic funds transfer (NEFT).

Under third-party payments, for instance, firms that export to Africa get their payments from Dubai, Singapore, Hong Kong and London.
The commerce ministry, on its part, has approached the RBI to exclude those exporters from the caution list that have an outstanding of up to 5-10 per cent of previous year exports, an official said.

Exports to Office of Foreign Assets Control (OFAC) sanctioned countries, including Sudan, also face resistance from banks that are reluctant to handle their documents.

"There are several banking related issues with Iran that need resolution as huge export potential exists there," the official reasoned.

The commerce ministry has sought establishment of banking ties in Iran for euro transactions. It has also pitched for opening up of Indian banking channels in those countries that do banking with Iran.

Exporters body Federation of Indian Export Organisations (FIEO) said that early resolution of all these issues would help reduce transaction cost of exporters.

Stay up to date on all the latest Business news with The New Indian Express App. Download now
Get the news that matters from New Indian Express on WhatsApp. Click this link and hit 'Click to Subscribe'. Follow the instructions after that.