RBI Extends period of realisation of export proceeds due to COVID-19

RBI Extends period of realisation of export proceeds due to COVID-19 Value of the exports is required to be realized within a period of 9 months from the date of exports. Now the same has been extended to 15 months from the date of export. In view of the disruption caused by the COVID-19 pandemic this step is taken. The time period for realization and repatriation of export proceeds for exports made up to or on July 31, 2020, has been extended. The measure will enable the exporters:

• to realise their receipts, especially from COVID-19 affected countries within the extended period and;
• provide greater flexibility to the exporters to negotiate future export contracts with buyers abroad.

[caption id="attachment_87608" align="aligncenter" width="660"] RBI Extends period of realisation of export proceeds due to COVID-19[/caption] Other measures taken by RBI are:

Review of Limits of Way and Means Advances of States/UTs

RBI had constituted an Advisory Committee under chairmanship Shri Sudhir Shrivastava. The Committee will review the Ways and Means limits for State Governments and Union Territories (UTs). Since final recommendations by the Committee are pending, it has been decided to increase WMA limit by 30 percent. This has been done to enable the State Governments to tide over the situation arising from outbreak of the COVID-19. The revised limits will come into force with effect from April 1, 2020 and will be valid till September 30, 2020.

Implementation of countercyclical capital buffer

The framework on countercyclical capital buffer (CCyB) was put in place by the RBI in terms of guidelines issued on February 5, 2015 wherein it was advised that the CCyB would be activated as and when the circumstances warranted, and that the decision would normally be pre-announced. The framework envisages the credit-to-GDP gap as the main indicator, which is used in conjunction with other supplementary indicators. Based on the review and empirical analysis of CCyB indicators, it has been decided that it is not necessary to activate CCyB for a period of one year or earlier, as may be necessary.