Trade Credits for Imports into India – RBI revises all-in-cost ceiling
As the domestic importers are experiencing difficulties in raising trade credits within the existing all-in-cost ceiling in view of the tight liquidity conditions in the international credit markets, the RBI has announced the revised all-in-cost ceiling for Trade Credits which will be:
Maturity Period | All-in cost ceiling over 6-month LIBOR | |
|---|---|---|
Existing | Revised | |
Up to one year | 75 basis points | 200 basispoints |
More than one year up to three years | 125 basis points | |
The all-in-cost ceiling will be reviewed from time to time depending on the conditions in the international financial markets.
The change in the all-in-cost ceiling will come into force immediately.
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. 27/RBI , Dated: October 27, 2008