Banks can consider extending time limit for settling import dues: Expert

Weekly advice on managing small businesses. This time SME chatroom talks about a RBI directive on import of goods and services.

Q. We have ordered some goods from a foreign seller on free on board (FOB) basis. We have to pay in advance. When we approached our bank they told us that the remittance can be made but we have to take a marine insurance policy for the shipment. Is the bank’s demand correct?

RBI Master Direction no.17/2016-17 dated January 1, 2016 (as amended) on Import of Goods and Services does not prescribe any such condition. It is possible that the banks want to secure your interests and in case they are extending credit to you, want to guard their interests