14 May 2023
Sir/Madam, Our export documents were directly sent to overseas buyer as exported goods are perishable nature. Now buyer has defaulted payment. ECGC wants to regularize the export documents by RBI to settle claim.But RBI is not regularize the export Bill's. Kindly advice to get ECGC claim.
07 July 2024
When dealing with perishable goods, timely documentation and payment are critical. Given that your buyer has defaulted on payment and the Export Credit Guarantee Corporation (ECGC) requires regularization of export documents by the Reserve Bank of India (RBI) to settle the claim, you need to follow a structured approach to address this situation.
### Steps to Get ECGC Claim Regularized by RBI:
#### 1. **Document Collection and Preparation:** - **Export Invoices**: Collect all export invoices related to the shipment. - **Bill of Lading (B/L)**: Obtain the Bill of Lading or airway bill if applicable. - **Shipping Documents**: Gather all other relevant shipping documents. - **Communication Records**: Collect all correspondence with the buyer regarding the shipment and payment. - **Proof of Delivery**: Ensure you have proof that the goods were delivered to the buyer.
#### 2. **Notify the Authorized Dealer (AD) Bank:** - Inform your authorized dealer bank (the bank through which the export documentation was processed) about the default and the need to regularize the export documents.
#### 3. **Write to the RBI through AD Bank:** - Prepare a formal request to the RBI, routed through your authorized dealer bank, explaining the situation and requesting regularization of the export documents. This letter should include all necessary details and supporting documents.
### Sample Letter to AD Bank for Submission to RBI: ```text [Your Name] [Your Address] [City, State, ZIP Code] [Email Address] [Phone Number] [Date]
The Manager [Your Bank's Name] [Branch Address]
Subject: Request for Regularization of Export Documents Due to Defaulted Payment by Overseas Buyer
Dear Sir/Madam,
We are writing to bring to your attention the need for regularization of export documents for a shipment of perishable goods that we exported to [Buyer's Name] in [Buyer's Country]. The details of the transaction are as follows:
- Export Invoice No.: [Invoice Number] - Date of Export: [Date] - Bill of Lading No.: [B/L Number] - Shipment Value: [Amount in USD] - Description of Goods: [Description of Perishable Goods] - Mode of Transport: [Sea/Air] - Buyer Details: [Buyer's Name and Address]
Despite our best efforts, the buyer has defaulted on the payment, and the Export Credit Guarantee Corporation (ECGC) requires the regularization of these export documents by the Reserve Bank of India (RBI) to process our claim.
Attached herewith are the following documents for your reference: 1. Export Invoices 2. Bill of Lading 3. Shipping Documents 4. Proof of Delivery 5. Correspondence with the Buyer 6. ECGC Policy Details
We kindly request you to forward our application to the RBI for regularization of the export documents at the earliest. We are ready to provide any additional information or documentation required to facilitate this process.
Thank you for your cooperation and assistance in this matter.
#### 4. **Submit Claim to ECGC:** - Once the RBI regularizes the export documents, submit the approved documents to ECGC along with your claim application. Ensure that you include: - Regularized export documents. - Proof of default by the buyer. - Claim form as required by ECGC.
### Additional Considerations: 1. **Legal Action Against the Buyer:** - Consider initiating legal action against the defaulting buyer to recover the payment, if feasible.
2. **Insurance Claim Process:** - Stay in regular contact with ECGC to understand their claim settlement process and ensure all required documents and information are provided promptly.
3. **Follow-Up:** - Regularly follow up with both your authorized dealer bank and the RBI (through the bank) to expedite the regularization process.
By carefully following these steps and maintaining thorough documentation, you can increase the likelihood of getting the export documents regularized by the RBI and subsequently receiving the ECGC claim settlement.
CAclubindia
