The Reserve Bank of India (RBI) has recently issued the Foreign Exchange Management (Export of Goods and Services) (Amendment) Regulations, 2021 to further amend the Foreign Exchange Management (Export of Goods and Services) Regulations, 2015.
Through this amendment regulation 15 which deals with advance payment against exports has been amended as follows:
Where an exporter receives advance payment (with or without interest), from a buyer / third party named in the export declaration made by the exporter, outside India, the exporter shall be under an obligation to ensure that the rate of interest, if any, payable on the advance payment shall not exceed 100 basis points above the London Inter-Bank Offered Rate (LIBOR) or other applicable benchmark as may be directed by the Reserve Bank, as the case may be.
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