1. DBOD.DIR.No.91/04.02.001/2011-12 Interest Rates on Export Credit in ForeignCurrency dated March 30, 2012
Keeping in view the tight liquidity conditions and widening of credit spreads due to recent developments in international financial markets, it has been decided to increase the ceiling rate on export credit in foreign currency by banks to LIBOR plus 350 basis points from the present ceiling rate of LIBOR plus 200 basis points with immediate effect, till March 31, 2012 vide circular dated 15th November 2011.
It has been decided that the prescriptions regarding ceiling rates on export credit in foreign currency and overseas line of credit as mentioned in the circular referred to above, will continue till September 30, 2012, subject to the same terms and conditions mentioned therein.
2.Trade Credits for Imports into India – Review of all-in-cost ceiling
Considering the developments in the global financial markets and the fact that domestic importers were experiencing difficulties in raising trade credit within the existing all-in-cost ceiling, the all-in-cost ceiling for trade credit was enhanced to 6 months Libor + 350 bps with effect from November 15, 2011 and was subject to review on March 31, 2012. On a review, it has been decided to continue with the enhanced all-in-cost ceiling for Trade Credits for a further period of six months as under:
Maturity Period | All-in-cost over 6 month LIBOR* |
Upto one year | 350 bps |
More than one year and upto three years |
* for the respective currency of credit or applicable benchmark |
The all-in-cost ceiling will include arranger fee, upfront fee, management fee, handling/ processing charges, out of pocket and legal expenses, if any.
The all-in-cost ceiling is applicable up to September 30, 2012 and subject to review thereafter. All other aspects of Trade Credit policy remain unchanged.
3. External Commercial Borrowings (ECB) Policy – Review of all-in-cost ceiling
Considering the developments in the global financial markets and the fact that borrowers were experiencing difficulties in raising ECBs within the existing all-in-cost ceiling, the all-in-cost ceiling for ECBs with average maturity of three and up to five years was enhanced to 6 months Libor + 350 bps with effect from November 23, 2011 and was subject to review on March 31, 2012. On a review, it has been decided to continue with the enhanced all-in-cost ceiling for a further period of six months in respect of ECBs as under:
Average Maturity Period | All-in-cost over 6 month LIBOR* |
Three years and up to five years | 350 bps |
More than five years | 500 bps |
* for the respective currency of borrowing or applicable benchmark |
. The all-in-cost ceiling is applicable up to September 30, 2012 and subject to review thereafter. All other aspects of ECB policy remain unchanged.
