RBI's New Forex Rules Leave Individual Service Exporters Uncertain Over EDF Compliance

New Delhi, Oct 27 (KNN) Individual service exporters remain uncertain about compliance with the RBI’s new Foreign Exchange Management Regulations, more than three weeks after their implementation, due to a lack of formal clarification on the Export Declaration Form (EDF) requirement.

Authorised dealer banks have adopted differing approaches to foreign remittances received by individuals, while most are yet to publish mandatory standard operating procedures (SOPs).

Professionals, including service providers and chartered accountants, have questioned whether individuals must file the detailed EDF. 

Although the regulations require exporters to submit the form, RBI Governor Sanjay Malhotra indicated that transactions of a ‘personal nature’ would be exempt, leaving the scope of the exemption unclear.

Banks Adopt Different Approaches

The issue gained attention after Ramesh Srivats, a marketing professional, said on X that his bank had asked him to submit an EDF for a foreign remittance received against consulting services.

He questioned whether individuals should be required to complete a complex form spanning four spreadsheets. Srivats said the bank had contacted him to clarify that he was not required to file an EDF as an individual.

Businessline reported that while one bank was not insisting on EDF submissions from individuals, the other had adopted a cautious approach, routinely sending the form to all service exporters irrespective of whether they had a business registration.

Banks Await RBI Clarification And SOPs

Rohan Sewani, head of operations and customer experience, Skydo, said banks expect RBI FAQs within one to two weeks, covering individual exemptions and reporting for non-SWIFT settlements. He said banks were taking a compliance-first approach, with customer queries rising since October 1. 

Meanwhile, RBI-mandated SOP publication remains incomplete, with only two of the 90 banks listed on the FEDAI (Foreign Exchange Dealers' Association of India) website having published theirs as of Friday.

Freelancers And Consultants Depend On Bank Guidance

Freelancers, consultants and other service providers receiving overseas payments remain dependent on banks for compliance guidance. 

Asish Philip Abraham, executive partner, Lakshmikumaran & Sridharan Attorneys, said formal RBI clarification was needed, adding that banks may continue enforcing existing EDF reporting requirements until the regulator issues FAQs or other guidance.

Uniform clarification is expected to address differing bank-level interpretations and standardise reporting requirements.

(KNN Bureau)