Reserve Bank Of India
A.P. (DIR Series) Circular No. 59
December 14 , 2012
To,
All Category - I Authorised Dealer Banks
Madam / Sir,
Trade Credits for Import into India
Attention of Authorized Dealer Category - I (AD Category - I) banks is invited
A.P. (DIR Series) Circular No. 28 dated September 11, 2012.
- As per extant guidelines on Trade Credit the companies in the infrastructure
sector , where “infrastructure” is as defined under the extant guidelines on
External Commercial Borrowings (ECB) are allowed to avail of trade credit up to
a maximum period of five years for import of capital goods as classified by DGFT
subject to the that (i) the trade credit must be abinitio contracted for a
period not less than fifteen months and should not be in the nature of
short-term roll overs; and (ii) AD banks are not permitted to issue Letters of
Credit/guarantees/Letter of Undertaking (LoU) /Letter of Comfort (LoC) in favour
of overseas supplier, bank and financial institution for the extended period
beyond three years.
- On review, it has been decided to further relax the condition of 'abinitio'
buyers' credit for 15 (fifteen) months to 6 (six) months for existing trade
credits. However, the condition regarding 'abinitio' buyers' credit for 15
months shall continue for future trade credit.
- All other aspects of Trade Credit policy will remain unchanged and should be
complied with. The amended trade credit policy will come into force with
immediate effect and is subject to review based on the experience gained in this
regard.
- AD Category-I banks may bring the contents of this circular to the notice of
their constituents and customers concerned.
- The directions contained in this circular have been issued under sections
10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and
are without prejudice to permissions / approvals, if any, required under any
other law.
Yours faithfully,
(Rashmi Fauzdar)
Chief General Manager
RBI/2012-13/337