ANNOUNCEMENT 11 Sep 2012
In September 2012, the government of India announced a change in its trade finance instruments.NUMBER OF INTERVENTIONS
1
SOURCE
11 September 2012 -
http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=7559&Mode=0
24 Septemeber 2013
http://rbi.org.in/scripts/NotificationUser.aspx?Id=8459&Mode=0
On 11 September 2012, the Reserve Bank of India amended the trade credits facility for import of capital goods.
The amendement allows companies in the infrastructure sector to avail such credits for a maximum period of five years. Normally, trade credit is allowed for a maximum period of three years and minimum period of one year.
Other conditions that will apply to the infrastructure sector :
i) the trade credit must be contracted for a period not less than 15 months and not be in the nature of short term roll-overs,
ii) Banks are not permitted to issue Letters of Credit/guarantees/Letter of Undertaking/Letter of Comfort in favour of overseas supplier, bank and financial institutions for a period beyond three years.
On 24 Septemeber 2013, the extended maximum period of 5 years was provided for trade credits for companies in all sectors. Further, the minimum period for such credits was relaxed to 6 months for all sectors.
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AFFECTED PRODUCTS