Advance Remittence for Aircraft purchase raised to USD 50 mn

Mumbai, June 29 (UNI) The Reserve bank today raised the ceiling of advance payments for airline companies for import of aircraft to USD 50 million.

The move will largely benefit the airline companies to make advance remittance without bank guarantee.

The Reserve bank, in an earlier directive dated September 17, 2003, had fixed the limit as USD one million.

''With a view to further liberalise and simplify the procedure for import of goods into India, it has been decided to allow airline companies..... to make advance remittance without bank guarantee, up to USD 50 million.'', says the RBI Directive.

Companies can make advanced remittance to make purchases of aircraft, helicopters or other aviation related deals using the provision.

However, RBI has made it mandatory for the airline companies to seek the requisite approval of Ministry of Civil Aviation before making advanced remittances.

Central bank has said Advance payments should be made strictly as per the terms of the sale contract. Also the payments should be made directly to the account of the manufacturer concerned, says the directive.

This apart, the import of goods should be made within six months from the date of remittance.

UNI