ANNOUNCEMENT 21 May 2014In May 2014, the government of India announced a change in its trade finance instruments.
NUMBER OF INTERVENTIONS
On 21 May 2014, the Reserve Bank of India allowed exporters to receive a long term export advance with up to 10 years term to be used for financing long term export contracts. The approval is subject to several conditons including three years' satisfactory track record, irrevocable supply orders, adjustment through future exports, ceiling on rate of interest of LIBOR plus 200 bps etc.
Earlier on 21 February 2012, the RBI had allowed authorized banks to provide exporters advance payments for goods which took more than a year to manufacture and ship from the date of receiving the advance payment, a facility for which prior approval was required from the RBI.