Merchanting trade compliance: AD banks must verify transactions, ensure timely completion and safeguard export proceeds.

Persons undertaking Merchanting Trade Transactions must complete both legs within prescribed timelines, make payments to overseas sellers and obtain receipts from overseas buyers (subject to AD discretion), and submit documentary evidence to the Authorised Dealer. AD banks must verify genuineness, apply KYC/AML checks, route the entire MTT through the same AD, verify shipping and related documents, monitor completion, permit limited short-term credit without LoU/LoC, earmark export receipts for import leg liabilities, and report defaults and transactions as required.

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