Exporters are asked to transfer export-related payments through banks
Exporters of boulders and aggregates to India are now required to make export-related payments through official banking channels.
The Royal Monetary Authority (RMA) set the requirement for exporters and importers involved in the boulder and aggregate export from Gelephu to Assam, India through a notification on October 26.
The notification stated that all receipts for trade in goods with residents of India must be received in Indian Rupees through formal banking channels. “However, it has been observed that some of the export receipts, especially from India are not being routed through formal banking channels as required.”
Bhutanese exporters have to route the export receipts through formal banking channels within 180 days from the date of export.
“Individuals violating provisions of the Foreign Exchange Rules and Regulations 2020 and other guidelines issued by RMA shall be liable for penalties as per the Penalty Rules and Regulations 2019,” according to the notification.
Only two exporters have been paying using the real-time gross settlement (RTGS) system, and most exporters and importers paid through cash or mobile banking.
The practice of making cash or mobile payments left local exporters at a disadvantage, since the ngultrum value was unofficially depreciated across the border by those involved in illegal ngultrum and Indian rupee exchange.
Exporters who chose to settle the payment using RTGS could also export boulders and aggregates directly to the market in India without having to depend on dealers and brokers from Dathgari, according to sources.
Officials from Bhutan Export Association (BEA) said many of the dealers from across the border were involved in the boulder business without a proper license. “Some don’t even have a banking account. They are now going through the processes to make payments through official channels,” said an official.
Meanwhile, as exporters aim to fulfill the requirements to export boulders and aggregates to Assam, India has dropped from 50 trucks in a day to 12 trucks. The boulder export to Bangladesh has dropped since August.
Program officer with BEA in Gelephu, Guru Wangchuk said that it would take a month for the export to pick up. “No exports are allowed without using RTGS payments. Boulder export completely stopped for three days but later allowed to move after consultation with the counterparts,” he said.
He said that the payment through official banking channels would make the trade more transparent and help the country earn expected INR value from exports.
“It would also streamline the export business. Those in the export business are applying for licenses now. The export would happen as usual within one month,” said Guru Wangchuk.
He added that the on-land route for the export to Bangladesh would be ready by November 2.
The bypass at Tirkikila near Assam Meghalaya border would be ready. However, the trucks will have to carry the loads according to the carrying capacity of the hume pipes culvert bridge, according to the official.
Regional Secretary with Bhutan Chamber for Commerce and Industry (BCCI), Kelzang said that RTGS payment was a must to make the export legal and sustainable.
“Payment related to export to Bangladesh was done through official banking channels but not for the export to Dathgari, Assam. Now they are coming to track. Market distortions could also be solved. The export would become systematic,” he said.
Exporter Raju Upreti from Gelephu the vehicles ferrying boulder consignments were stopped at Dathgari after BEA made it compulsory to do the export transaction through banking channels.
“This indicates that a few fronting people work for a commission where dealers from Dathgari execute the business. After the notification, they were creating problems by not letting vehicles pass,” he said.
