LIBOR Plus Ceiling for Trade Credits of 350bps to Continue till 31 March 2013

[RBI Circular No. 58 dated 14^th December 2012]

Sub: Trade Credits for Imports into India – Review of all-in-cost ceiling

Attention of Authorized Dealer Category-I (AD Category-I) banks is invited to A.P. (DIR Series) Circular No. 44 dated November 15, 2011, A.P. (DIR Series) Circular No. 100 March 30, 2012 relating to the all-in-cost ceiling of Trade Credits for imports into India.

2. It has been decided that the all-in-cost ceiling as specified in A.P. (DIR Series) Circular No. 44 dated November 15, 2011 will continue to be applicable till March 31, 2013 and subject to review thereafter. All other aspects of Trade Credit policy remain unchanged.

3. The amended ECB policy will come into force with immediate effect and is subject to review based on the experience gained in this regard.

4. AD Category-I banks may bring the contents of this circular to the notice of their constituents and customers concerned.

5. 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.