8/6/2019 ion of Bills

1/3

CRYSTALLISATION OF BILLSWhen a bill is not paid on the due date, the liability in foreignexchange hasto be converted into rupee liability. Such liabilityobviously cannot be keptopen in foreign currency andaccordingly has to be converted into rupeeliability. Assuch, the bills which remain unpaid, the liabilitypertaining tosuch bills is converted into rupee liability which isknown as crystallization.Al l exch ange r i sk i s t o bepas sed on to expo r t e r . Expor t e r s shou ldbeencouraged to book forward cover. Normal transit period for

all foreign billsas per FEDAI is 20 days

All bills on the 30thday from the expiry of normal transit period in caseof unpaid demand bills should be crystallized byconverting to rupee liability(TT selling rate on the date ofcrystallization or the original bill buying ratewhichever is higherwill be applicable).Interest will also be recovered on the

date of crystallization for the periodfrom date of expiry ofthe normal transit period / notional due date to thedate ofcrystallization at the appropriate rate of interest asdirected by RBIfor overdue export bills.The unpaid bill will betreated as outstanding under the sanctioned limit of thecustomer with the exchange risk open againsthim.Swap cost/ gain from due date to date of crystallization shall be absorbed

byauthorized dealer.

REALISATION OF BILL AFTER CRYSTALLISATION:On actual realization, TT buying rate will be appliedon the realizationamount or contracted rate in case offorward contract will be applied. Thecrystallized amount

8/6/2019 ion of Bills

2/3

will be adjusted through this amount and any rise or fallwi ll beadjusted with the customers account.Interest from the date of crystallization to the date of actualreceipt of payment will also be recoveredfrom the customer.In case of dishonor of bill, the rupee equivalent of thebillamount arrived at the current TT selling rate or the amountoriginallyadvanced, whichever is higher will be recovered.All applicable charges inforeign currency at the current TT selling rate will be

applied. Interest atappropriate rate prescribed by RBI will be

recovered

NORMAL TRANSIT PERIOD:

For all bills in foreign currency other than exports to Iraq 20 days.For exports to Iraq 60 days (providedexports conform to unguidelines).For bills drawn in rupees 3 days if reimbursement is provided at the centre

of negotiation.Bank located at 7 days if reimbursement isprovided in Indiaf r o m a c e n t r e o t h e r t h a nn e g o t i a t i n g b a n k c e n t r e 2 0 d a y s i n c a s eo f reimbursing bank outside India Or Bills not under LC.Inc a s e o f e xpo r t u s a nc e b i l l s ( F o r e i gn / R upe e )w he re due da t e s a r e reckoned from date of shipment ordate of bill of exchange etc., no normaltransit time will beapplicable, in case reimbursing bank is other than

wherenegot iating bank maintains Nostro account o rreimbursement obtainedthrough other bank normal 5days transit period interest will be charged.

8/6/2019 ion of Bills

3/3