Textile exporters fear that their names might figure in the Reserve Bank of India’s (RBI’s) caution list after April 20, 2017, deadline set for updating the shipping bills by banks. They have urged the banking sector regulator to remove the names of companies with a good track record as it would prevent them from making exports.

In a letter to the RBI, the apex textiles exporters’ body, The Cotton Textiles Export Promotion Council (Texprocil), has requested for an update in the centralised banking system before making the caution list for the pending shipping bills public.

The EDPMS (Export Data Processing and Monitoring System), which has been introduced by the RBI to monitor payments against export bills, requires all banks to report in this system details of the export proceeds realisation pertaining to the shipping bills filed after February 28, 2014.

“There are many shipping bills against which payments have already been realised and the electronic bank realisation certificates (e-BRCs) have been issued by the concerned banks. But, the EDPMS is yet to be updated by the banks. It is likely that many of the textiles exporters will find their names appearing in the caution list after the deadline of April 20, 2017, for no fault on their part,” said Ujwal Lahoti, chairman, Texprocil.

“Texprocil has taken up this matter with RBI and we hope that some decision will be taken on the matter at the earliest. Otherwise, it may have an adverse impact on textiles exports,” Lahoti added.

A large number of textiles exporters have pointed out that many of the banks have not completed the EDPMS updation of the shipping bills.

As an interim relief, RBI has granted temporary exemption up to April 20, 2017, to exporters whose importer-exporter code (IECs) were appearing in the caution list in the EDPMS and whose outstanding shipping bills (in value terms) were less than 30 per cent of the total value of shipping bills for the period from March 1, 2014, to March 1, 2016. After April 20, 2017, based on the latest position of outstanding export receivables, exporter’s name may appear in the caution list on EDPMS.

Exporters would face severe hardships in dispatching consignments abroad once their name appears in RBI’s caution list.

Source: Business Standard