AFFECTED FLOWOutflow (subsidised)
ANNOUNCED AS TEMPORARYNo
On 15 November 2011, the Reserve Bank of India through Circular DBOD.DIR. No. 52 /04.02.001/2011-12 increased the interest ceiling rate on export credit in foreign currency.
The ceiling rates vary depending on the origin of the lender. For domestic banks, the ceiling has been raised from LIBOR/EURIBOR plus 200 basis points to LIBOR/EURIBOR plus 350 basis points. This rate is subject to the condition that the banks will not levy any other charges.
Further, the interest ceiling rate with overseas banks has been increased from LIBOR/EURIBOR plus 100 basis points to 250 basis points.
This rate is applicable to fresh credit advances after 31 March 2012.
The interest rates of export credits in foreign currency were deregulated as of 4 May 2012 (see related measure).
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