Lakshmi Kumaran & Sridharan AttorneysAn ISO 9001 / 27001 certified law firm

Benefits available to exporters & importers to continue

4th April, 2012

The Reserve Bank of India has extended two of the major credit-related benefits available to the importers and exporters. One of them pertains to interest rates on export credit in foreign currency and the other is on all-in-cost ceiling of trade credits for imports into India.

As regards the interest rates on export credit in foreign currency, RBI Notification No. DBOD.DIR.No.91/04.02.001/2011-12, dated 30-3-2012 states that the prescriptions regarding ceiling rates on export credit in foreign currency and overseas line of credit as mentioned in the earlier circular in November, 2011, will continue till September 30, 2012. The November circular had provided for reduced interest rates in case of both pre-shipment and post-shipment credits. It had also instructed the banks not to levy any other charges over and above the interest rate.

In case of trade credits for imports into India, the instructions as provided in the earlier circular issued in this regard in November, which had raised the ceiling from the then ceiling of LIBOR+200bps to LIBOR+350bps, have been extended for further period of 6 months till September, 2012. RBI A. P. (DIR Series) Circular No. 100, dated 30-3-2012 has been issued in this regard.  
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