Regulatory Updates: Mecklai- where risk meets its match

INTEREST RATE CEILING ON RUPEE EXPORT CREDIT

Updated as of 20 Oct, 2006

The validity of the interest rates on rupee export credit indicated in the circular dated April 28, 2006 would now remain in force upto April 30, 2007.

Interest Rates effective from November 1, 2006 to April 30, 2007 will be not exceeding BPLR minus 2.5 percentage points per annum for the following categories of Export Credit

Categories of Export Credit

1.	*Pre-shipment Credit*
	(a) Up to 180 days
	(b)Against incentives receivable from Government covered by ECGC Guarantee up to 90 days
2.	*Post-shipment Credit*
	(a) On demand bills for transit period (as specified by FEDAI)
	(b) Usance bills (for total period comprising usance period of export bills, transit period as specified by FEDAI, and grace period, wherever applicable)
	(i) Up to 90 days (ii) Up to 365 days for exporters under the Gold Card Scheme.
	(c) Against incentives receivable from Govt. (covered by ECGC Guarantee) up to 90 days
	(d) Against undrawn balances (up to 90 days)
	(e) Against retention money (for supplies portion only) payable within one year from the date of shipment (up to 90 days)
BPLR : Benchmark Prime Lending Rate Note: 1. Since these are ceiling rates, banks would be free to charge any rate below the ceiling rates. 2. Interest rates for the above-mentioned categories of export credit beyond the tenors as prescribed above are deregulated and banks are free to decide the rate of interest, keeping in view the BPLR and spread guidelines.