RBI/2011-12/258
DBOD.DIR.No. 52 /04.02.001/2011-12

November 15, 2011

All Scheduled Commercial Banks

Dear Sir/Madam,

Interest Rates on Export Credit in Foreign Currency

Please refer to our circular DBOD.DIR.(Exp).No.76/04.02.001/2009-10 dated February 19, 2010 as also paragraph 7 of Master Circular on Rupee/Foreign Currency Export Credit and Customer Service to Exporters dated July 01, 2011  relating to export credit in foreign currency.

2. 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,  subject to the express condition that the banks will not levy any other charges viz. service charge, management charge etc except for recovery towards out of pocket expenses incurred.  Similar changes may be effected in interest rates in cases where EURO LIBOR / EURIBOR has been used as the benchmark.The rates of interest applicable have been incorporated in the Annex to the directive DBOD.DIR.No.51/04.02.001/2011-12 dated November 15, 2011 enclosed to this circular.

3. The revision in the rates of interest would be applicable only to fresh advances and are subject to review after March 31, 2012

4. Further, in modification of the instructions contained at para 5.1.3(iii) a of the above mentioned Master Circular dated July 1, 2011, the ceiling interest rate on the lines of credit with overseas banks has also been increased from six months LIBOR / EURO LIBOR / EURIBOR plus 100 basis points to six months LIBOR / EURO LIBOR / EURIBOR plus 250 basis points with immediate effect, till March 31, 2012 and is subject to review thereafter.

Yours faithfully,

(P.R.Ravi Mohan)
Chief General Manager

DBOD.DIR.BC.No.51 /04.02.001/2011-12

November 15, 2011

Interest Rates on Export Credit in Foreign Currency

In exercise of the powers conferred by Sections 21 and 35A of the Banking Regulation Act, 1949, the Reserve Bank of India being satisfied that it is necessary and expedient in the public interest so to do, hereby directs that, with effect from November 15, 2011, the interest rates on export credit in foreign currency would be as indicated in the Annex enclosed to this Directive.

(G. Padmanabhan)
Executive Director

Annex

Schedule of Interest Rates on Export Credit in Foreign Currency of Scheduled Commercial Banks effective from November 15, 2011