RBI extends overseas borrowing interest rate norms till June
Updated: Apr 11, 2014 12:42:40pm
Mumbai, Apr 11 (KNN) The Reserve Bank will be continuing the existing guidelines on interest rates for overseas borrowings for another three months until June 2014.
"On a review, it has been decided that the all-in-cost ceiling...will continue to be applicable till June 30, 2014, and is subject to review thereafter. All other aspects of the ECB policy remain unchanged," the RBI has said in a notification.
Earlier the RBI directive said, the all-in-cost ceiling was applicable till March 2014.
“It has also been decided that for availment of trade credit, the period of trade credit should be linked to the operating cycle and trade transaction. AD banks may ensure that these instructions are strictly complied with,” the RBI notification said earlier in July 2013.
All-in-cost ceiling refers to the interest that can be paid on external commercial borrowings.
For loans beyond five years, it is six months Libor plus 500 basis points. Libor stands for London interbank offered rate, the key benchmark that reflects how much it costs banks to borrow from each other.
In a separate notification, the RBI said companies can avail of trade credit facility from overseas for the import of capital goods till June.
All other aspects of the trade credit policy remain unchanged, it added. (KNN/SD)
"On a review, it has been decided that the all-in-cost ceiling...will continue to be applicable till June 30, 2014, and is subject to review thereafter. All other aspects of the ECB policy remain unchanged," the RBI has said in a notification.
Earlier the RBI directive said, the all-in-cost ceiling was applicable till March 2014.
“It has also been decided that for availment of trade credit, the period of trade credit should be linked to the operating cycle and trade transaction. AD banks may ensure that these instructions are strictly complied with,” the RBI notification said earlier in July 2013.
All-in-cost ceiling refers to the interest that can be paid on external commercial borrowings.
For loans beyond five years, it is six months Libor plus 500 basis points. Libor stands for London interbank offered rate, the key benchmark that reflects how much it costs banks to borrow from each other.
In a separate notification, the RBI said companies can avail of trade credit facility from overseas for the import of capital goods till June.
All other aspects of the trade credit policy remain unchanged, it added. (KNN/SD)
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