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RBI/2005-06/194
Ref.No.MPD.BC.276/07.01.279/2005-06
October 28, 2005
Kartika 6, 1927(Saka)
To,
All Scheduled Commercial Banks
Dear Sir,
Interest Rate Ceiling on Rupee Export
Credit
On September 24, 2001, it was decided
to effect reduction in the ceiling of interest rates charged by scheduled commercial
banks on pre-shipment and post-shipment rupee export credit by one percentage
point (linked to BPLR) with effect from September 26, 2001. This dispensation
was earlier extended up to October 31, 2005.
2. Subject to the review of
the BPLR system afresh, as indicated in the Mid-term
Review of the Annual Policy Statement for the year 2005-06, it has been
decided to extend the validity of the reduction in the interest rates (linked
to BPLR) on pre-shipment rupee export credit up to 180 days and post-shipment
rupee export credit up to 90 days announced on September 24, 2001 for a further
period of six months up to April 30, 2006 (Annex).
3. Kindly acknowledge receipt.
Yours faithfully,
(K.Kanagasabapathy)
Adviser-in-Charge
Annex
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Category
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With effect from November
01, 2005
(up to April 30, 2006)
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Pre-shipment Rupee Export Credit
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(i) Up to 180 days
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Not exceeding BPLR minus 2.5 percentage points.
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(ii) Beyond 180 days and up to 270 days
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Free.
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Post-shipment Rupee Export Credit
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| (a). On demand bills
for transit period
(as specified by FEDAI)
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Not exceeding BPLR minus 2.5 percentage points.
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(b) Usance bills
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(i) Up to 90 days
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Not exceeding BPLR minus 2.5 percentage points.
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(ii) Beyond 90 days and up to 6 months from
the date of shipment
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Free.
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BPLR : Benchmark Prime Lending Rate
Note : Since these are ceiling rates, banks would
be free to charge any rate below the ceiling rates.
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