The FEDAI Rules (10th edition) for import transactions came in to force with effect from 01 April 2019. The FEDAI rule 3.1 deals with the application of exchange rate, rule 3.2 deals with the application of Interest, rule 3.3 deals with crystallisation of Import Bill under Letters of Credit as detailed below;
Application of exchange rate:
While retiring an import bill, the authorized dealer shall apply the prevailing Bill selling rate or exchange rate as per hedge contract, if a hedge contract is in place. For crystallisation of import bills, the same rule of the exchange rate is applicable.
The determination of stamp duty on import bills shall be as per the exchange rate provided by the authority concerned.
Application of Interest:
The bills negotiated under import letters of credit shall carry a commercial rate of interest as applicable to banks “domestic advances” from time to time. The interest remittable on interest-bearing bills shall be subject to the directive of Reserve Bank of India in this regard.
Crystallisation of Import Bill under Letters of Credit:
The unpaid foreign currency import bills drawn under Letters of credit shall be crystallised as per the stated policy of the bank. FEDAI has given the authorized dealers the freedom to decide on the period for crystallization based on risk factors like credit perception of different types of exporter clients, operational aspects, etc.
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