RBI's reported move over remittances causes panic among exporters

The Engineering Export Promotion Council of India (EEPC) on Monday said reports that the RBI was contemplating to forward cases of non-realisation of export proceeds to the ED, have created panic among exporters who submitted their records about remittance receipts to their banks.

"We have received several complaints from our members about the banks not issuing documents about the remittance receipts even after submission of all the required papers. Thus, exporters are facing a double whammy -- losing refunds like drawbacks and the possibility of Enforcement Directorate action," EEPC Chairman Ravi Sehgal said in a statement.

He said while the EEPC has been regularly advising its members to reconcile their remittances records, several banks are not issuing clearances, especially with regard to shipments to countries like Syria, Iran and Sudan.

At a time when exports are facing global headwinds like slowdown in the American economy, uncertainty over Brexit and the trade war between the US and China, the Reserve Bank of India and the government should be dealing with issues like remittances in a "friendly manner", Sehgal said. 

"In any case, it is in the interest of exporters to get their remittances in as quickly as possible. It is in rare cases that there may be temptation of foreign exchange arbitrage which could even result into losses. So, the problem seems to be more of procedures and should be treated like that," he said.

According to the apex body of engineering exports, India's overall merchandise exports remained static, logging in less than 1 per cent growth this November.-IANS