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EDPMS / IDPMS explained; India Export and Import Regulations.

depicting the international import export trade

EDPMS stands for Export Data Processing and Monitoring System and IDPMS stands for Import Data Processing and Monitoring System. 

It is an online import-export software in India initiated by RBI in 2014 to monitor all the transactions between the bank and the exporters to maintain transparency and authenticity in the export-import business. 

The main advantage behind this initiative is to cultivate a habit of having an easier tracking of data and history across banks and Indian Customs  related to the particular import-export business, 

  • Hassle-free entry of data other than manually entering every detail which could be time-consuming for the importer or exporter, 
  • Effective handling of shipping bills, resolving issues related to the hampered use of advance which is received for exports and, 
  • Last but not least since everything is online, the overall process becomes a lot more streamlined.

RBI Notification regarding EDPMS (dtd. May 26, 2016)

The Reserve Bank of India is India's central bank and regulatory body under the jurisdiction of Ministry of Finance, Government of India. It is responsible for the issue and supply of the Indian rupee and the regulation of the Indian banking system.

In the RBI notification regarding EDPMS, it is stated that the system will have the capability of enabling the banks to download the shipping bills or softex forms issued by export agencies such as customs, special economic zones (SEZ), and Software Technology Parks of India (STPIs), bills of entry issued by the ports.

The data is then cross-checked with the data corresponding to the funds received in your bank accounts from the exporting company, this can either be from an account-based in India or an overseas account. By doing this, the banks are officially able to track the particular export consignment efficiently and also helps the exporters to claim their profits as fast as possible. It also notifies about the cautioning/de-cautioning list of exporters which is a feature that is automated in the given EDPMS software. This enables the AD (Authorised Dealer) banks to access this particular list on a day-to-day basis. However, this is where the exporter needs to be aware of the caution listing where if the shipping bill of their export remains open for more than the required period in the EDPMS software without having any extension period provided, he/she can get caution listed. The exporter will only be de-caution listed when all the respective bills against them are concluded and or if any specific extension period is provided to them by the AD bank. 

This crucial system across stakeholders has proven to boost the foreign trade operations on a large scale, thus contributing to the country’s enhanced score in the Ease of Doing Business Index. 

For more information regarding the RBI notification here’s the link that you can click to get more clarity 

https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=10423&Mode=0

AD Bank

Authorized dealer banks are banks that have an RBI license to primarily buy and sell foreign currencies for specific purposes. Its main aim is to simplify certain foreign exchange facilities for NRI. However, in terms of EDPMS, the AD bank has some additional responsibilities that are to be carried to ensure that every step in the import-export process goes right. Here are some responsibilities that are very important for you to know as an importer or exporter:-

  • AD Banks examine the requests that are required to grant EDF (Export Declaration form) waiver from the exporter for export of goods free of cost and export promotion up to a certain per cent.
  • The entire amount of the export value of the goods that are exported is secured through an AD bank precisely the manner which is mentioned in the Foreign Exchange Management (Manner of Receipt & Payment) Regulations.
  • Exporters are given three years by the AD banks to prove their record as satisfactory to receive long term export advance which spans for about 10 years, and in this period functioning of long term supply contracts of export of goods can be done.
  • When an exporter receives advance payment from a particular buyer outside India, the exporter is subjected to do the shipments of the goods within one year from the date of receipt of advance payment. EDPMS will capture all the details related to these advance payments or remittances for exports. AD banks will have to report all the inward remittances, advance remittances as well as the old inward payments received for the export of products to EDPMS. In addition to this, the AD bank also needs to report the electronic FIRC to EDPMS which is a Foreign Inward Remittance Certificate that gets issued when a particular exporter receives foreign currency, and in turn, it can be used as proof for future security purposes.
  • The AD bank should ensure that the advance received by the exporter should be utilized to execute for exporting purposes instead of any other futile purposes since the transaction is a bonafide transaction.

Mention in Shipping Bill

A Shipping Bill is an important document required by the customs authorities for the clearance of goods. A shipping bill is issued by the shipping agent and represents some kind of certificate for all parties, included ship's owner, seller, buyer and some other parties.

When an exporter is sending specific products from one country to another, he/she is obliged to perform certain formalities in terms of submitting various applications, obtaining licenses, paying off duties and the list goes on. To receive clearance for export from the customs officials, the exporter will have to apply for something called a shipping bill. And the goods will only be loaded, unless and until the exporter produces such a shipping bill. The reason why mentioning the shipping bill has been considered as an important factor while exporting is that it enables the exporters to track the status of their payments against their shipping bill so that they can monitor the position of their export remittance.

Caution Listing 

an exporter would be caution-listed by the Reserve Bank based on the recommendations of the AD bank concerned, depending upon the exporters track record with the AD bank and investigative agencies.

Caution listing is the process of listing those exporters whose data is not captured by the EDPMS software. Once on the list, exporters packing credit are turned down which delays their exports and it also leads to the retaining of the ‘non-letter of credit bills’.So even if the goods reach the buyer on time, the banking documents get hampered which will lead to extra cost and demurrage or holdup charges to be paid by the exporters.

  As per the reports published by a business magazine on 17th December 2018, a total of  90,000 exporters are listed on the caution list, out of which about 65,000 are active exporters. Since EDPMS has a tradition of creating authenticity, some exporters are not ready to fill in the details of their inward remittances with the system and that’s the prime reason why they get added to the caution lists. By doing this The EDMPS will not only improve India’s business climate, but the data will be crucial for the RBI to discover at any point in time how much of the dollar payments meant for India are drifting abroad.

Documents required by the bank to reconcile

  • Request letter with debit authority
  • FEMA declaration
  • KYC Report
  • Copy of Importer Exporter code certificate
  • Purchase Order
  • Payment Instruction
  • Undertaking submission of Shipping Bill

Why should you care as an Importer or Exporter?

The exporter, who is the person or entity sending or transporting the goods out of the country. The importer, who is the person or entity buying or transporting goods from another country into the importer's home country. The carrier, which is the entity handling the physical transportation of the goods.

During the initial two / three years of launch, many Exporters and Importers did not pay attention to the entire flow of EDPMS. This led to a huge amount of mismatch in the data related to the details of the actual export. RBI also came up with a regulation wherein a caution listing of exporters will be instituted for all those exporters and importers who fail to make the shipment within the one year or don’t put accurate details about their particular consignment which can lead to the mismatch of the data while it is been checked by the banks. 

This is where the exporter and importer need to careful while exporting and importing goods or products because after the expiry of the said period of one year and if the exporter is not able to export in the given time, the exporter will need approval or NOC (No Objection Certificate) from the RBI to continue their export and import activities.

Thus EDPMS and IDPMS software are considered to be quite an important and efficient tool for the bank as well as the companies involved in the import-export market as it has enhanced the timely monitoring of the export-import data. Hence as an Importer or Exporter EDPMS or IDPMS, it makes it convenient to regularise their shipping bill or bill of entry by matching payments. And last but not least it also provides timely alerts with respect to outstanding bills and remittances to ensure that the customers are not caution listed due to the outstanding bills.

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Jithisha Koshy