Mumbai, Nov 9 (KNN) In a move which will give relief to traders, the Reserve Bank of India (RBI) has allowed third party payments for export/import transactions subject to certain conditions.

“With a view to further liberalising the procedure relating to payments for exports/imports and taking into account evolving international trade practices,…AD (Authorised Dealer) banks may allow payments for export of goods / software to be received from a third party (a party other than the buyer) subject to conditions,” RBI said in a notification.

Further, “Banks are also permitted to make payments to a third-party for import of goods, it added.  Banks, however, would have to follow certain conditions,” RBI added.

The notification added that, “Firm irrevocable order backed by a tripartite agreement should be in place.”

Third party payment should come from a Financial Action Task Force (FATF) compliant country and through the banking channel only, it said.

Normally payment for exports has to be received from the overseas buyer named in the Export Declaration Form (EDF) by the exporter and the payment shall be received in a currency appropriate to the place of final destination as mentioned in the EDF irrespective of the country of residence of the buyer. 

Similarly, payments for the import should be made to the original overseas seller of the goods, the apex bank added.   (KNN/SD)