RBI directs banks for tight monitoring of export finance

The Dollar Business Bureau A probe initiated by the Enforcement Directorate on a public sector Bank prompted the Reserve Bank of India issue a directive asking all the banks to tighten and monitor their export finance. A notable hike in the number and volume of advances received for exports remaining outstanding beyond the stipulated deadline on account of non-performance of such exports has forced the RBI to issue such a notification, said sources. Usually, the concerned exporters are reminded by the banks to complete their export commitments within the time limits. The RBI has asked the banks to forward such cases where the exporters fail to meet the export requirements to its regional offices within 21 days from the end of each quarter. The apex bank also reiterated that the banks should exercise proper due diligence and ensure compliance with KYC (know your customer) and AML (anti-money laundering) guidelines so that only bona-fide export advances flow into India. Doubtful cases as also instances of chronic defaulters may be referred to Directorate of Enforcement (DoE) for further investigation, RBI’s notification said.  

This article was published on February 10, 2015.