RBI seeks easier write-off norms after ED notices to exporters

The Reserve Bank of India (RBI) has recommended that the central government relax write-off norms related to unpaid receivables of exporters after notices by a law enforcement agency spooked exporters, two people with direct knowledge of the matter said

- Pavan Burugula

RBI seeks to address exporters’ concerns after several of them received Enforcement Directorate (ED) notices for alleged violation of foreign exchange norms, the people cited above said, requesting anonymity. Many Indian companies have unrecovered dues from their exports.

RBI’s master directions on the export of goods stipulate how such dues must be written off. According to the rules, any dues up to 5% of the total export proceeds of a company can be written off by the company itself.

If the dues exceed this threshold, then it would have to be written off by the authorized dealer (AD) bank. In both scenarios, the exporter is required to submit supporting evidence to AD bank, which proves that the company has exhausted all recovery options.