RBI discontinues Automatic Caution Listing of Exporters

The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) has decided to discontinue the system-based automatic caution-listing of exporters in view of the impact of the COVID-19 pandemic.  While reading the Statement on Developmental and Regulatory Policies dated 09.10.2020, RBI Governor Shaktikant Das said that “Exports have been adversely impacted by the pandemic-related contraction in external demand. In this environment, it is crucial to provide flexibility to exporters in the realisation of export proceeds and to empower them to negotiate better terms with overseas buyers. In order to facilitate the same, and make the caution-listing process exporter-friendly and equitable, it has been decided to discontinue the system-based automatic caution-listing.”

RBI introduced the Export Data Processing and Monitoring System (EDPMS) in 2014 for all Authorised Dealers to bring their transactions with the exporters online. In 2016, it launched the system-based automatic caution-listing wherein the ‘Caution / De-caution Listing’ of exporters was automated. Exporters were put on RBI’s caution list if any shipping bill against them remained open for more than two years in EDPMS and there was no extension granted by the bank or RBI. Additionally, the normal system of caution-listing based on the recommendations of the Authorised Dealer (AD) bank before the expiry of 2 years in certain cases continued. The RBI will henceforth undertake caution-listing on the basis of case-specific recommendations of the Authorised Dealer (AD) bank, the Governor said.