RBI/2011 -12/257
A. P. (DIR Series) Circular No. 44
November 15, 2011
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
A.
P. (DIR Series) Circular No. 27 dated October 27, 2008 relating to the
all-in-cost ceiling of Trade Credits for imports into India.
- On a review of developments in the global financial markets and the fact that
domestic importers are experiencing difficulties in raising Trade Credit within
the existing all-in-cost ceiling, it has been decided to revise the all-in-cost
ceiling for Trade Credits as under:
| Maturity Period |
All-in-cost over 6 month LIBOR* |
| Existing
|
Revised |
| Upto one year |
200 bps |
350 bps |
| More than one year and upto three years |
* for the respective currency of credit or applicable benchmark
The all-in-cost ceilings include arranger fee, upfront fee, management fee,
handling/ processing charges, out of pocket and legal expenses, if any.
- The change in the all-in-cost ceiling will come into force immediately. The
enhancement in all-in-cost ceiling is applicable upto March 31, 2012 and subject
to review thereafter. All other aspects of Trade Credit policy remain unchanged.
- AD Category-I banks may bring the contents of this circular to the notice of
their constituents and customers concerned.
- 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 are
without prejudice to permissions / approvals, if any, required under any other
law.
Yours faithfully,
(Meena Hemchandra)
Chief General Manager-in-Charge