RBI/2007-2008/337
A.P.(DIR
Series) Circular No.42 May 28, 2008 To All
Category-I Authorised Dealer Banks Madam/Sir, Trade
Credits for Imports into India – Review of all-in-cost ceiling Attention
of Authorised Dealer Category-I (AD Category-I) banks is invited to paragraph
6 of the A.
P. (DIR Series) Circular No. 87 dated April 17, 2004 relating to the all-in-cost
ceiling of Trade Credits for imports into India. 2. At
present, the all-in-cost ceiling in respect of Trade Credits up to one year is
50 basis points over 6 months LIBOR for the respective currency of credit or applicable
benchmark. On a review, it has been decided to enhance the all-in-cost ceiling
for trade credits as under:
| Maturity
Period | All-in
cost ceiling over 6-month LIBOR* | | |
Existing |
Revised | |
Up to one year |
50 basis points |
75 basis points |
| More than one
year up to three years | 125
basis points | 125
basis points | | *
for the respective currency of credit or applicable benchmark |
3.
This amendment to Trade Credit Policy will come into force immediately. All other
aspects of Trade Credit remain unchanged. 4. Necessary
amendments to the Foreign Exchange Management (Borrowing or Lending in Foreign
Exchange) Regulations, 2000 dated May 3, 2000 are being issued separately. 5.
AD Category-I banks may bring the contents of this circular to the notice of their
constituents and customers concerned. 6. The directions
contained in this circular have been issued under sections 10(4) and 11 (1) of
the Foreign Exchange Management Act, 1999 (42 of 1999) and is without prejudice
to permissions/approvals, if any, required under any other law. Yours
faithfully, (D. Mishra)
Chief General Manager |
|