Ceiling Rate on Export Credit in Foreign Currency Reduced
THE Reserve Bank of India in consultation with the Government of India has decided to reduce the ceiling rate on export credit in foreign currency by banks to LIBOR plus 200 basis points from the present ceiling rate of LIBOR plus 350 basis points with immediate effect, subject to the express condition that the banks will not levy any other charges viz. service charge, management charge etc except for recovery towards out of pocket expenses incurred.
Similar changes may be effected in interest rates in cases where EURO LIBOR/EURIBOR has been used as the benchmark. The rates of interest applicable were incorporated in the Annexure to the DBOD.DIR.(Exp).No.75/04.02.001/2009-10 dated February 19, 2010.
Further, in modification of the instructions contained at para 5.1.3(iii)a of the Master Circular on Rupee / Foreign Currency Export Credit dated July 1, 2009, the ceiling interest rate on the lines of credit with overseas banks has also been reduced from six months LIBOR/EURO LIBOR/EURIBOR plus 150 basis points to six months LIBOR/ EURO LIBOR/EURIBOR plus 100 basis points with immediate effect.