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RBI to discontinue system-based automatic caution-listing of exporters

RBI to discontinue system-based automatic caution-listing of exporters
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RBI Governor Shaktikanta Das

Highlights

In an effort to provide flexibility to exporters in the realisation of export proceeds, the Reserve Bank of India (RBI) has decided to discontinue the system-based automatic caution-listing of exporters.

In an effort to provide flexibility to exporters in the realisation of export proceeds, the Reserve Bank of India (RBI) has decided to discontinue the system-based automatic caution-listing of exporters.

Addressing a virtual press conference today, RBI Governor Shaktikanta Das said the decision will also empower exporters to negotiate better terms with overseas buyers. Stating that exports have been adversely affected due to the pandemic related contraction in demand, Mr. Das said the decision is likely to make the system more exporter-friendly and equitable.

He added, 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.

As part of the automation of the Export Data Processing and Monitoring System, the 'Caution/De-caution Listing' of exporters was automated in 2016. Accordingly, the exporters were to be caution-listed automatically, if any shipping bill against them remained outstanding for more than two years.

After contracting for six months in a row, India's exports grew by 5.27 per cent year-on-year to 27.4 billion dollars in September while the trade deficit narrowed to a three-month low of 2.91 billion dollars.

Announcing the decisions taken by the central bank's MPC, Shaktikanta said that the RBI left key interest rates unchanged as widely expected while retaining an accommodative monetary policy stance to support the coronavirus-hit economy of India. The MPC kept the repo rate, its key lending rate, at 4 per cent, while the reverse repo rate or the key borrowing rate stayed at 3.35 per cent.

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