RBI liberalises third party payment norms

The Reserve Bank today liberalised the third party payment norms for import of goods by removing the ceiling of USD 100,000.

Earlier, the amount of an import transaction for third party payment should not have exceed USD 100,000.

The central bank also simplified certain documentation norms related with third party payments for export and import transactions.

"... With a view to liberalising the procedure, the limit of USD 100,000 eligible for third party payment for import of goods, stands withdrawn," the RBI said in a notification.

The RBI further said the condition "firm irrevocable order backed by a tripartite agreement should be in place" for overseas transactions may not be insisted upon in certain cases by banks.

This has been done in view of the difficulties faced by exporters and importers, it said.

Third party payment could be made to a Financial Action Task Force (FATF) compliant country and through the banking channel only.

RBI said the bank concerned should be satisfied with the bona-fides of the transaction and export documents, such as, invoice and they should consider the FATF statements while handling such transaction.