In a bid to facilitate small value export transactions, the Reserve Bank of India has enhanced the amount that can be received as export related remittances through online payment gateway service providers to $3,000 from $500.

The RBI, last year, permitted banks dealing in foreign exchange to offer the facility of repatriation of export related remittances by entering into standing arrangements with service providers or OPGSPs.

Banks offering the facility are required to open a Nostro collection account for receipt of payments.

A Nostro account is a bank account held in a foreign country by an Indian bank.

Exporters availing themselves of the remittance facility (through the bank-service provider arrangement) are required to open notional accounts with the OPGSP.

It has to be ensured that no funds are allowed to be retained in such accounts and all receipts should be automatically swept and pooled into the Nostro collection account opened by the bank.

Separate account

Banks have to either maintain a separate Nostro collection account for each service provider or they should be able to delineate the transactions in the Nostro account of each.

The debits that will be permitted to the Nostro account opened under the bank-service provider arrangement include repatriation of funds representing export proceeds to India for credit to the exporters' account; payment of fee to the service provider; and charge back to the importer where the exporter has failed in discharging his obligations under the sale contract.

Balances

The balances held in the Nostro collection account have to be repatriated and credited to the respective exporter's account with a bank in India immediately on receipt of the confirmation from the importer and, in no case, later than seven days from the date of credit to the account.

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