Trade Credits for Imports into India – Review of all-in-cost ceiling – RBI instructions
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
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 |
This amendment to Trade Credit Policy will come into force immediately. All other aspects of Trade Credit remain unchanged. Necessary amendments to the Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) Regulations, 2000 dated May 3, 2000 are being issued separately.
RBI Circular No. 42/RBI., Dated: May 28, 2008