Notification No. FEMA 23(R)/(5)/2021-RB. /Dtd. 08th September, 2021
The Foreign Exchange Department of the RBI has notified a set of regulations to amend the existing Foreign Exchange Management (Export of Goods and Services) Regulations, 2015 which shall come into force as on the date of its publication in the Official Gazette.
Amendment: Substitution Regulation 15(1)(ii)-
“ii) the rate of interest, if any, payable on the advance payment shall not exceed 100 basis points above the London Inter-Bank Offered Rate (LIBOR) or other applicable benchmark as may be directed by the Reserve Bank, as the case may be; and”
The amendment is introduced in Regulation 15 which basically talks about advance payment against exports and related obligations of an exporter. One of such obligation relates to the rate of interest on advance payment.
In the existing provisions, it was provided that the exporter has to ensure that the rate of interest, if any, payable on the advance payment does not exceed the rate of interest London Inter-Bank Offered Rate (LIBOR) + 100 basis points.
In regards to the same, it is provided in the amendment that the RBI may also specify any other benchmark for the purpose of fixing rate of interest.
RESERVE BANK OF INDIA
(Foreign Exchange Department)
(CENTRAL OFFICE)
NOTIFICATION
Mumbai, the 8th September, 2021
Foreign Exchange Management (Export of Goods and Services) (Amendment) Regulations, 2021
No. FEMA 23(R)/(5)/2021-RB.—In exercise of the powers conferred by sub-section (1) and sub-section (2) of section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank of India makes the following amendments in the Foreign Exchange Management (Export of Goods and Services) Regulations, 2015 [Notification No. FEMA 23(R)/2015- RB dated January 12, 2016] (hereinafter referred to as ‘the Principal Regulations’), namely:
1. Short title and commencement: –
i. These Regulations may be called the Foreign Exchange Management (Export of Goods and Services) (Amendment) Regulations, 2021.
ii. They shall come into force from the date of their publication in the Official Gazette.
2. In the Principal Regulations, in Regulation 15, in sub-regulation 1, for clause (ii), the following shall be substituted, namely: –
“ii) the rate of interest, if any, payable on the advance payment shall not exceed 100 basis points above the London Inter-Bank Offered Rate (LIBOR) or other applicable benchmark as may be directed by the Reserve Bank, as the case may be; and”.
S. AMAR, Chief General Manager
[ADVT.-III/4/Exty./254/2021-22]
Foot Note: – The Foreign Exchange Management (Export of Goods & Services) Regulations, 2015 [Notification No. FEMA 23(R)/2015-RB dated January 12, 2016] were published in the Official Gazette vide G.S.R.No.19 (E) dated January 12, 2016 in Part II, Section 3, Sub-Section (i) and subsequently amended as under:
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