OBJECTIVE QUESTIONS ON FOREX RELATED

TOPICS
PREPARED BY N RAGHU, DGM, ZI, HYDERABAD
FOR THE PROMOTION ASPIRANTS
FROM SCALE I TO SCALE IV BASED ON
2015,2016 AND 2017 FOREX CIRCULARS.
(phone : 8333979794 e mail: raghun@canarabank.com)

EXPORTS
1.Before discounting the export bill the branch has to verify the

a) Physical copy of the shipping bill b) physical copy submitted

by the exporter to be verified on line in the ICE GATE portal of
customs c) no need to verify the shipping bill d) none of the above
2.Specific Approval List (SAL) on the exporters is issued by

(a) Exim Bank b) RBI c) ECGC d) Ministry of Finance

3.The Discretionary limit fixed by ECGC to our Bank for our exporter client is

a) INR 300 lakhs b) INR 100 lakhs c) INR 400 lakshs d) no limit
4.Exporter’s caution list issued by

a) our Bank b) RBI c) ECGC d) none of the above

5.The premium payable to ECGC on ECIB (WT PC) cover for preshipment
Export credit is

a ) 6 paise/INR 100 b) 4/50 paise /INR 100 c) 8 paise/INR 100 d) 10

paise/INR 100
6.The premium payable to ECGC on ECIB (WT PS) cover for post shipment
export credit is

a ) 6 paise/INR 100 b) 4/50 paise /INR 100 c) 8 paise/INR 100 d) 10

paise/INR 100

7. Restricted cover countries list is issued by

a) our Bank b) RBI c) ECGC d) none of the above

8.Buyer wise specific approved list is issued by

a) our Bank b) RBI c) ECGC d) none of the above

9. Report of default to ECGC to be intimated by the Bank

a) on the date of account becoming NPA b) on delinking of the export bill

c) 1 month from the recall of the advance or 4 month from the due
date/extended due date d) on the date of OTS settlement
10. In the case of ECGC post shipment finance, the ECGC premium is to be

a) paid by the exporter b) paid by the Bank c) Bank has the discretion to
waive the premium basing on the standing of the party d) none of the
above
11. As per FEMA full value of export to be realized ______ from the date of
shipment

a) 6 months b) 9 months c) 12 months d) 18 months

12. Export documents to be submitted by the exporters to the Bank within
------------- from the date of export

a) 7 days b) 15 days c) 21 days d) 30 days e) none of the above

13. All categories of foreign exchange earners are allowed to credit ____% of their
foreign exchange earnings to their EEFC Accounts.

a) 25% b) 50% c) 10% d) 100% e) none of the above

14. Exporters are permitted to export goods free of cost in a financial year up to a
limit of

a) RS 1 lakhs b) 10 lakhs c) 5 lakhs d) no value ceiling e) not permitted

15. Exporters receiving advance payment from the overseas buyers can pay interest
on the amount received at LIBOR (London Inter Bank Offered Rate) at _____

a ) LIBOR + 100 bps b) at LIBOR c) LIBOR + 250 bps d) cannot pay any
interest
16. Banks may allow exporters having a minimum of three years’ satisfactory
track record to receive long term export advance up to a maximum tenor of
_____ years to be utilized for execution of long term supply contracts for export
of goods

a) 1 year b) 2 years c) 10 years d) 5 years

17.Firms / Companies and other organizations participating in Trade
Fair/Exhibition abroad can gift the unsold items to the extent of USD _____

USD 5000 b) USD 100000 c) USD 10000 d) cannot gift any items
18. Banks can allow remittances abroad for Indian Co’s setting up offices abroad
upto --------- for initial expenses

a) up to 15% of the average annual sales/income or turnover during the last two
financial years or up to 25% of the net worth, whichever is higher b) no value
ceiling any amount can be remitted c) up to 100% of the net worth d) up to
25% of the export turnover in the financial year
19.In case of exporters undrawn balance is permitted in certain of trade up to --------
of the export value

a) 5% b) 10% c) 25% d) 50% e) not applicable

20. Reduction in invoice value in normal course is permitted for exports up to _____
of export value

a) 5% b) 10% c) 25% d) 50% e) 100%

21.In case of exporters who are in export business for more than 3 years reduction
in invoice value is permitted to the extent of _____

a) 5% b) 10% c) 25% d) 50% e) 100%

22. In case of unrealized export bills self write off by the exporter is permitted up to
the value _____ total export bills proceeds realized during the previous year

a) 5% b) 10% c) 25% d) 50% e) 100%

23. The exporters would be caution listed if any shipping bill against them remains
Open/unpaid for more than ------------ from the date of export in EDPMS
provided no
extension is granted by AD Category –I bank / RBI.

a) 6 months from the date of export b) 1 year from the date of export c) 2
years from the date of export d) 3 years from the date of export
24. Request for issuance of guarantees to caution listed exporters can be done

a) by Banks under the RBI delegated powers b) can be issued against 100%
deposit c) Banks cannot issue requires RBI permission d) none of the above
25. Under export bills “M” bills are lodged in the system where

a) 100% payment is directly received by the exporter from abroad b) bills

where modification is required c) where part payment for export is received
d) none of the above
 IMPORTS
1)As per RBI guidelines import bill payment has to be settled by the importer in
India

a) 3 months from the date of shipment b) 3 months from the date of receipt of
goods in to India c) 6 months from the date of shipment d) 6 months from the date of
receipt of goods in to India.
2)As per RBI, Banks can extend time up to __________ for payment of import bills

a) upto 12 months from the date of shipment b) up to 18 months from the date
of shipment c) up to 24 months from the date of shipment d) up to 36 month
from the date of shipment.
3)When the importer submits the origina/xerox copy of Bill of Entry the same has
to be verified by the branch

a) physical copy with a customs seal and stamp b) no physical copy only on line
verification to be done c) need not be done as RBI has exempted submission
of bill of Entry d) in the BOE settlement file, duly linking the same to
outstanding outward remittance message (ORM)
4) All the payment for import bills including collection. Advance remittance, LC
Bills should be compulsorily entered in

a) SWIFT system b) in FCC package c) need to be entered in the outward

remittance Message d) none of the above
5) In case of advance remittance for imports other than capital goods the physical
import of goods should be made within

a) 3 months from the date of remittance b) 6 months from the date of

remittance c) 3 years from the date of remittance d) no restriction in the
period
6) In case of advance remittance for imports for capital goods the
Physical import of goods should be made within

a) 3 months from the date of remittance b) 6 months from the date of

remittance c) 3 years from the date of remittance d) no restriction in the
period
7)For permitting advance remittance for import for a customer, the customer
should be having satisfactory dealing with our Bank for a period of

a) 6 months b) 3 months c) 9 months d) 1 year e) no restriction on the

Period
8) Import of above USD 1,00,000 the Bill of entry copy/photo copy – (proof of
import) to be submitted to the Bank by the importer ________

a) within 3 months from the date of remittance b) 6 months from the date of
remittance c) no need to submit as RBI has exempted d) 12 months from
the date of remittance
9) a Claused bill of Lading is

a) Certain clauses of mentioned in the Bill of Lading b) there is a notification in

the BL regarding the condition of the goods goods received for shipment c) the
goods are stored in the vessel as per the clauses d) none of the above
10) The existing all in cost ceiling for trade credits for imports in to India is

a) 350 Bps over 6 months LIBOR b) LIBOR Rate c) 100 bps over LIBOR d)
500 Bps over LIBOR
11) Branches/Offices may allow prepayment of import bills without deducting the
proportionate interest for unexpired portion of usance period up to -----

a) 3-4 days can be allowed b) can be allowed freely c) cannot allow d) up to 1

month can be allowed.
12) RBI has permitted bank to write off import bills up to a limit of _____

a) 10% of the invoice value b) 25% of the invoice value c) 5% of the invoice
Value d) import bills cannot written off
13) Banks can consider granting extension of time for settlement of import up to
maximum period of ______ to the importer

a) six months at a time with a maximum period of three years. b) up to 1 year

c) up to 180 days d) up to 3 months
14) For import of aircrafts Banks may allow advance remittance without bank
guarantee or an unconditional, irrevocable standby letter of credit up to a limit
of USD _______

USD 50 million b) USD 1,00,000 c) USD 10 Mn d) no value ceiling

15) The all in cost under Trade credits for import in to India is

a) 350 bps over 6 months LIBOR b) 500 bps over 6onths LIBOR c) no
ceiling on the interest d) 100 bps over 6 months LIBOR
16. Advance remittance for imports exceeding __________, branches should obtain
a guarantee from an international bank of repute situated outside India, OR a
guarantee of an Authorised Dealer Category I Bank in India.

a) USD 1,00,000 b) 2,00,000 c) USD 1 Million d) USD 10,000

17. Import bill to be delinked at

a) bill buying rate b) TT selling rate c) bill selling rate d) TT buying rate
18.Import Sight bills under LC to be delinked on

a) 7 days from the date of receipt of the bill b) 10 days from the date of bill
covering letter c) 10 days from the date of receipt of the bill by FD/Designated
branch d) 15 days from the date of receipt of the bill by FD/Designated branch.

19.In case of import Lloyds clause is applicable where

a) individual shipment is above 30 lakhs b) individual shipment is above 10

lakhs c) individual shipment is above 15 lakhs d) none of the above
20.In case of import SGS clause is applicable where

a)individual shipment is above 30 lakhs b) individual shipment is above 10

lakhs c) individual shipment is above 15 lakhs d) none of the above
21. Import usance bills under LC to be delinked on

a) 7 days from the date of receipt of the bill b) 10 days from the date of bill
covering letter c) 10 days from the date of receipt of the bill by
FD/Designated branch d) one the due date of the bill (maturity date) .

22. Import Export code (IEC) code issued by

a) RBI b) Commerce Ministry c) External Affiars Ministry d) Finance

Ministry e) Director General of Foreign Trade (DGFT)
23. Importers can receive import bills directly from the overseas Bank/supplier up
to a value of USD

a) USD 1,00,000 b) USD 2,00,000 c) USD 3,00,000 d) cannot receive import

bills directly
24. For importers whose track record has been good and where he is unable to
submit Bank guarantee from the overseas Bank, waiver of Guarantee from the
Overseas Banks can be permitted by the Bank up to the value of USD.

a) USD 2,00,000 b) USD 1 Mn c) USD 3 Mn d) USD 5 Mn

25. For import of rough diamonds waiver of Guarantee from the
Overseas Banks can be permitted by the Bank up to the value of USD.

a) waiver permitted irrespective of the amount b) USD 1 Mn c) USD 3 Mn

d) USD 5 Mn
 REMITTANCES & NRI MATTERS
1.In our Bank Foreign Demand Drafts (FDD’s) can be issued by

a)All the Indian branches b) only Foreign Departments c) B category branches

and Fex cells d) only by Integrated Treasury at Mumbai
e) FD’s/B category branches and FEX cells.
2. The validity period of the Foreign Demand Draft of our Bank is

a) 12 moths b) 3 months c) 6 months d) no validity period

3. Unpaid FDD’s to be delinked by

a) 12 months from the date of issue b) 9 months from the date of issue
should not be delinked till it is paid d) 18 months from the date of
issue.
4. For delinking the Foreign Demand Draft (FDD) - the rate to be applied

a) TT selling rate b) TT buying rate c) at the original rate of issue

d) DD buying rate
5. A Resident in India shall sell the realized foreign exchange due or accrued as
remuneration for services rendered, whether in or outside India, or in settlement
of any lawful obligation, or an income on assets held outside India, or as
inheritance, settlement or gift,

a) seven days from the date of receipt b) need not sell can be kept c) 30 days
from the date of receipt d) 10 days from the date of receipt
6. All Inward remittances received from abroad should be adjusted/paid to the
beneficiary

a) within 3 days from the date of receipt b) within 7 days from the date of
receipt c) within 15 days from the date of receipt d) 10 days from the date
of receipt
7. Joint NRO account with a resident can be opened with the following
Operations
a)former or survivor b) either or survivor c) No 1 or survivor c) none of
the above
8.What is meant by “final Credit Service”
a)this is a service provided to our top customers of our Bank b) This is a
credit service provided to all the employees of the Company who is banking
with us c) this is a service provided by Nostro correspondent abroad for
collection of overseas cheques for final credit without recourse to us d) none
of the above
9. Balances in the NRO account representing current income can be repatriated
abroad up to ___ in a financial year subject to payment of local taxes

a) entire balance in the NRO account can be repatriated b) upto USD 1 Mn

c) up to USD 1,00,000 d) up to USD 1 Billion

10. NRE joint account with a resident can be opened

a) not permitted b) can be opened with a condition Former or Survivor c)

can be opened with a E or S clause d) none of the above

11. FCNR account in USD/GBP/EUR/AUD/CAD can be opened for a maximum

period of
a) 1 year b) 3 years c) 5 years d) 10 years

12. Transfer between NRO accounts of the same NRI Customer is

a) not permitted b) freely permitted c) permitted at the Bank’s discretion

d) none of the above

13. A foreign National who is resident of India on his relocation abroad can remit
his assets up to ______ in a financial year

a) cannot remit any amount b) can remit up to USD 1 Mn in a financial year

c) can remit up to USD 1 Bn in a financial year d) none of the above
14. The validity period of a FIRC (Foreign Inward Remittance Certificate) is

a) 3 months b) 6 months c) 1 year d) no validity period

15. FIRC can be issued for

a) advance remittance for exports b) credit to NRE account c) for receipt of

FDI/FII d) for credit to resident account e) all the above purposes

16.A resident individual can send remittances under the Liberalized Remittance
Scheme for purchasing immovable property outside India to the extent of USD
____

a) Resident Indians cannot purchase property abroad b) can send remittance

up to USD 2,50,000 c) can send remittance up to USD 1 Mn d) requires RBI
approval
17. A Indian resident going abroad is permitted to take INR to the extent of
________

a) Up to INR 25,0000 permitted b) only Foreign Currency can be taken no INR

c) any amount of INR can be taken d) INR 1 lac permitted
18. A resident Indian can retain foreign currency notes, bank notes and foreign
currency travellers’ cheques not exceeding ________

a) up to US$ 2000 b) cannot retain to be surrendered to the Bank c) up to USD

10,000 d) up to USD 5,000
19. Auto reversal of FCDB amount shall be done along with differential interest, if
any to the debit/ force debit of CASA accounts of the borrowers to which the
FCDB proceeds were credited which is outstanding beyond

a) 30 days b) 60 days c) 90 days d) 15 days e) Auto reversal not applicable

to FCDB’s
20. A Special Non-Resident Rupee (SNRR) Account can be opened by the Banks for
a maximum period of _______

a) 1 year b) 2 year c) 5 year d) 7 years e) 10 years

21. The resident Power of Attorney holder of a NRE account is permitted to
repatriate funds outside the Country

a) by way of gifts b) is permitted to remit to the account holder only c) can

freely remit the funds as per FEMA regulations d) cannot make remittance
outside the country.
22. Balances in the NRO account can be repatriated abroad except for current
income of the account holder and up to ______ in a financial year by NRIs and
PIOs,

a) USD 1,00,000 b) up to USD 1 million c) up to USD 1 Billion d) entire

balances can be repatriated

23. Under the Joint NRE account the maximum number of persons who should be
NRI’s can be

a) 2 persons b) 4 persons c) No restriction any number d) cannot open NRE

joint account
24. Foreigners/NRI coming in to india have to declare the foreing currency bought
by them in person in CDF (currency declaration form) for ______ amount

a) foreign currency notes exceeding USD 5000 b) Foreign currency and

Travellers cheques both exceeding USD 10,000 c) no need to declare foreign
Currencies d) up to USD 1 Million e) a and b
25. The maximum amount of American Express Travellers Cheques Bank can sell
to a resident individual going abroad is USD _______ per day

a) USD 3000 b) USD 5000 c) 10000 d) 25000 e) no ceiling

 OTHERS
1. As per RBI requirements all the ECB (External Commercial Borrowings)
raised by the customers are to be

(a) Compulsorily hedged up to 100% of the borrowing including interest (b)

partial hedging permitted at the discretion of the bank (c) RBI approval to
be obtained for waiving the hedge (d) Banks can permit waiver depending on
the standing of the party
2. Reporting the ODI (Overseas Direct Investments) transactions needs to be
reported by the Bank to RBI within in ____ from the date of transaction

a) 60 days b) 90 days c) 15 days d) 30 days e) need not be reported to RBI

3. What is maximum limit up to which a resident individual can make

investment under ODI (Overseas Direct Investment)

a) up to the limit permitted under LRS which is presently USD 2,50,000

b) up to 400% of the individual’s net worth c) up to USD 1 Mn d)
individuals cannot make any remittance

4. Associations/trusts receiving donations from abroad under FCRA (Foreign

Contribution Regulation act has to register with ------------------ and
obtain registration number.

a) Ministry of finance b) Ministry of Home affairs c) RBI d) Ministry of

External affairs

5. Startup Companies are permitted to raise loans from abroad in the form
of ECB (External commercial borrowings) up to a limit of ________ in a
financial year

a) USD 3 million b) USD 20 million c) USD 10 million d) USD 1 million

6.Corporate can issue rupee denominated bonds abroad for a maximum
amount of ______ in a financial year

a) USD 750 Mn equivalent b) INR 50 billion c) INR 100 billion d) USD 500
Mn

7. The minimum maturity period of a rupee denominated bonds issued

abroad shall be ______

15 years b) 10 years c) 5 years c) 3 years d) no maturity period

8.Corporates can borrow abroad in Foreign currency under ECB ( External
Commercial borrowing) under Automatic Route of RBI up to a limit of

a) 100 million b) 100% of the Corporates net worth c) USD 750 million
 d) USD 500 million
9.Foreign Direct Investment (FDI) can be made under insurance sector up
to a limit of ______ of the equity

a) 100% b) 24% c) 49% d) not permitted

10.A resident individual can send remittances under the Liberalized
Remittance Scheme for purchasing immovable property outside India.
up to a limit of

a) USD 1,00,000 b) USD 1 Million c) USD 2,50,000 d) resident cannot

buy properties abroad required RBI approval
11. Which are the resident foreign accounts

a)RFC, RFC (D), b) EFFC, Diamond dollar account c) FCNR, NRO, NRE
d) a and b e) a and c

12. Trade transactions under Rupee Drawing Arrangements (RDA)

permitted by RBI is up to a limit of _______ per transaction

a) no trade transactions permitted under RDA b) no ceiling on the amount

c) up to Rs 15 lakhs d) up to 10 lakhs
13. The all in cost permitted by RBI under External commercial Borrowing
(ECB) for the Indian entities borrowing from abroad is for period of
over 3 years but below 5 years is ______

a) 350 bps over 6 months LIBOR b) 500 bps over 6onths LIBOR c) no
ceiling on the interest d) 100 bps over 6 months LIBOR ]
14. The Indian Company cannot make investment in Overseas
companies/cannot acquire companies abroad

(a) listed countries as announced by RBI b) investment in

African countries facing exchange problems c) investment in FATF
(financial Action Task force) as non co-operative countries and
Territories listed by USA d) none of the above
15. Under FCRA (Foreign Contribution Regulation Accounts) all withdrawals
above INR _______ shall be way of Account Payee Cheques/Demand Drafts

a) above INR 10000 b) above INR 20000 c) irrespective of the amount all
withdrawals shall be by way of crossed cheques d) above INR1 lakh
16. All FCRA (Foreign Contribution Regulation Accounts) opened at the
branch should be treated as
a) Low Risk b) High Risk c) Medium Risk d) FCRA accounts are exempted
from risk
17. companies to manage/hedge their foreign exchange exposures are
allowed to book foreign exchange forward contracts up to a limit of USD
---------------- without any requirement of documentation on the basis of a
simple declaration.
a) up to USD 1 Billion b) up to USD 1,00,000 c) up to USD 1 Million d)
cannot book forward contracts without documentary evidence
18. Liaison / Branch / Project Offices of foreign entities in India can open
and maintain rupee accounts with Banks in India

a) cannot open required RBI approval b) can maintain one account with
Banks in India without RBI approval c) can maintain any number of
accounts d) none of the above
19. A project office/branch office of foreign entities can acquire a
immovable property in India

a) no cannot acquire b) can acquire with RBI permission c) can freely

acquire property for their business use d) none of the above
20. Interest rates on FCNR/NRE is revised by the Bank

a) 1st day of every month b) revised when MCLR is revised c) revised by

the Bank as per RBI instructions d) none of the above
21. FCNR/NRE interest rates are regulated/fixed by

A) individual banks can fix the interest rates b) fixed by Foreign

Exchange Dealers Association of India c) revised/fixed by Banks monthly
based on the RBI guidelines d) none of the above
22. A start up Company recognized by Government of India can raise ECB
loan from abroad to a maximum extent of USD or equivalent in other
currencies including INR

a) USD 1 Mn b) USD 3 Mn c) USD 10 Mn d) cannot raised foreign currency

loans
23. Foreign investment in India in “other financial services is permitted up
to under Automatic route

a) 24% b) 74% c) 100% d) not permitted

24. Foreign investment in India in to the NBFC”s is permitted under
Automatic route up to

a) 24% b) 74% c) 100% d) not permitted

25. The maximum amount which can be borrowed by an Corporate Entity in
India a financial year under the automatic route by issuance of overseas
bonds shall be
a) INR 50 billion b) equivalent to USD 500 Mn c) equivalent to USD 750 Mn
d) Indian Corporates are not permitted to issue rupee bonds abroad

.
 KEY TO THE QUESTIONS

EXPORTS
1(b) 2 (c) 3 (a) 4 (b) 5 (a) 6 (b) 7 (c) 8 (c) 9 (c) 10 (b) 11 (b) 12 (c) 13 (d) 14 (c) 15 (a)

16 © 17 (a) 18 (a) 19 (b) 20 (c) 21 (e) 22 (a) 23 (c) 24 (c) 25 (a)

IMPORTS
1© 2, (d) 3 (d) 4 (c) 5 (b) 6(c) 7(d) 8 (a) 9 (b) 10 (a) 11 (a) 12 (c) 13 (a) 14 (a) 15 (a)

16 (b) 17 (c) 18 (b) 19 (c) 20 (a) 21 (d) 22 (e) 23 (c) 24 (d) 25 (a)

REMITTANCES & NRI MATTERS

1 (e) 2 © 3 (b) 4 (b) 5(a) 6 (b) 7 (a) 8(c) 9 (b) 10 (b) 11(c) 12(a) 13 (b) 14 (c) 15 (c)

16(b) 17 (a) 18 (a) 19 (b) 20 (d) 21 (b) 22(b) 23 (b) 24 (e) 25 (d)

OTHERS
1 (a) 2(c) 3 (a) 4(b) 5 (a) 6 (b) 7 (c) 8 (c) 9(c) 10 (c) 11 (d) 12 (c) 13 (a) 14 (c) 15 (b)

16 (b) 17 (c) 18 (b) 19 (c) 20 (a) 21 (c) 22 (b) 23 (c) 24 (c) 25 (a)
 FOREX QUESTIONS

1. What is LRS (liberalised Remittance scheme)

Under the scheme each resident individual can remit for capital and current accounts
transactions abroad up to alimit of USD 2,50,000 in a calendar year.

2. What is caution list

List issued by RBI – exporters who have exported goods and not repatriated the funds are
banned from making further exports, Banks cannot handle the documents of the caution
listed exporters and it requires RBI approval.

RBI has permitted Banks to handle caution listed export documents only where the
exporter has received 100% advance payment or an irrevocable LC has been opened by
the overseas buyer.

3. What is specific approval list

List issued by ECGC on the defaulting exports, for covering the specific approval list
exporters ECGC prior approval has to be obtained.

4. What is PCFC

Preshipment credit in Foreign Currency, the advantage is interest will be charged to the
exporter at LIBOR (London Inter Bank Offered rate) international rate.

5. What is SWAP charge

When early relaisation of export bill or early delivery under Forward contracts happens,
to set right the same, Bank does a SWAP transaction incurring a cost, which it will charge
the customer.

6. Whether joint NRE account with a resident can be opened

Yes Now RBI has permitted with a operation condition “Former or Survivor basis”

7. Whether operatives accounts can be opened under FCNR ie.,, SB/current account etc

No. only Term deposits are permitted and the operations are subject to RBI guidelines.

8. What is RDA (Rupee Drawing Arrangement)

Bank has established RDA arrangement with 35 exchange houses and 29 foreign Banks
and our own 3 branches. Validity of the exchange company draft is 90 days only
Trade transaction from exchange house permitted up to 15 lakhs now.
9. How to verify Bill of Entry

Branches/Offices should verify the authenticity of the Bills of Entry submitted by the
Importer by accessing the Custom’s website duly ensuring that the IE Code of the
importer customer matches with IE Code appearing in Customs website and also there
should be specific notation in the BOE regarding “out of Charge”..

10. What are the precautions to be taken for advance remittance for imports

The party should have a satisfactory account with us for the last 1 year
OPL from the overseas seller to be taken
The account should be fully KYC compliant
Bill of Entry to be submitted by the importers 3 months from the date of remittance,

11. What is final credit service

This is a service provided by Nostro correspondent abroad for collection of overseas

cheques for final credit without any recourse to us

12. What precaution to be taken before you discount an export bill

physical copy submitted by the exporter to be verified on line in the ICE GATE portal of
customs before discounting the bill

13. Advance remittance for exports

The exporter has to ship the goods within 12 months from the date of receipt of
remittance from abroad failing which the Bank has to make a report to RBI.

14. NRO account

An NRO account can be opened jointly with residents on ‘former or survivor’ basis. NRIs
and/or PIOs may hold NRO accounts jointly with other NRIs and/or PIOs.

15. What is Forfaiting

Forfaiting is a mechanism of financing exports

a) by discounting export receivables

b) evidenced by bills of exchange or promissory notes
c) without recourse to the seller (exporter)
17. What is Natural Hedge.

When a customers avails foreign currency loans like FCLR, Buyers credit, ECB etc and if
he is able to repay the same through his export earnings then we say that he has a natural
hedge ie., he is not exposed to exchange risk as he is able to repay the FC loan through
FC earnings.

18. What is delinking

It is a process by which the forex liability (which keeps fluctuating depending on the rate
movement) is crystalised to a rupee liability. This applies to Import and export
transactions.

19. what is clean packing credit

In certain type of raw materials required for export, the exporter has to pay advance
amount before the supplier supplies the material. Normally clean pakcing credit will be a
sanctioned as a sub limit to the Packing credit and requires specific approval from the
sanctioning authority. The risk is the liability under the clean packing credit will be clean
till the exporter receives the goods to his Premises and hypothecates the same to the
Bank.

20 what is payment under reserve , what is the risk in that transaction.

When the Bank negotiates an export documents under LC, which is defective meaning
not as per the LC terms, then the Bank negotiates the same under reserve, meaning the
Bank reserves the right to recover the export advance from the Exporter in case of
rejection of documents by the overseas buyer.