What changed
The previous directive on export credit in foreign currency, set to expire on March 31, 2012, has been extended. The new directive continues the same ceiling rates and conditions for a further six months until September 30, 2012.
What it means for you
Banks can continue offering export credit in foreign currency at the existing capped rates without any change in pricing or terms. This provides stability for exporters and lenders, avoiding any sudden repricing or operational adjustments for the next six months.
What you must do
- Continue applying the existing ceiling rates on export credit in foreign currency and overseas lines of credit as per the November 2011 circular.
- Ensure all export credit facilities in foreign currency adhere to the same terms and conditions until September 30, 2012.
- Update internal systems and loan documentation to reflect the extended validity period.
- Communicate the extension to relevant treasury and credit teams handling export finance.
Who it affects
Scheduled commercial banks (excluding RRBs) offering export credit in foreign currency, Exporters availing foreign currency export credit, Banks managing overseas lines of credit
What is the effective period for the extended ceiling rates?
The extended ceiling rates are effective from April 1, 2012, to September 30, 2012.
Are there any changes to the terms and conditions from the previous circular?
No, the terms and conditions remain exactly the same as those specified in the November 15, 2011 circular.
Which banks are covered by this directive?
All scheduled commercial banks, excluding Regional Rural Banks (RRBs), are covered.