ANNOUNCEMENT 19 Feb 2010In February 2010, the government of India announced a change in its trade finance instruments.
NUMBER OF INTERVENTIONS
Circular DBOD.DIR.(Exp).No. 76/04.02.001/2009-10
On 19 February 2010, the Reserve Bank of India through Circular DBOD.DIR.(Exp).No. 76/04.02.001/2009-10 reduced 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 reduced from LIBOR/EURIBOR plus 350 basis points to LIBOR/EURIBOR plus 200 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 reduced from LIBOR/EURIBOR plus 150 basis points to 100 basis points.
The interest rates have been periodically amended until being deregulated in May 2012 (see related measures)