Swap Credit Maturity Lowered to One Year from Three Years
[RBI
Circular No. 54 dated 25th September 2013]
Sub:
Overseas Foreign Currency Borrowings by Authorised Dealer Banks – Enhancement
of limit
Attention
of Authorised Dealer Category - I (AD Category – I) banks is invited to A. P. (DIR
Series) Circular No. 40 dated September 10, 2013, in terms of which AD Category
I banks were allowed to borrow beyond 50 per cent of their unimpaired Tier I
capital subject, inter alia, to the condition that the borrowing would have a
minimum maturity of three years.
2. On a review,
it has been decided to lower the requirement of minimum maturity from three
years to one year for the aforesaid borrowings made on or before November 30,
2013 for the purpose of availing of the Swap facility from the Reserve Bank of
India. It may be noted that after the said date, foreign currency borrowing by
AD Category I banks beyond 50 per cent of their Tier I Capital shall have to be
of a minimum maturity of three years.
3. 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 is without prejudice
to permissions/approvals, if any, required under any other law.