RBI Raises Export Credit Ceiling to LIBOR + 100 bps
No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2005-06/362 · issued 18 Apr 2006 · ~2 min read
Quick answerRBI has increased the ceiling rate on export credit in foreign currency from LIBOR + 75 bps to LIBOR + 100 bps, effective April 18, 2006. This applies to both fresh and existing advances for the remaining period, impacting pre-shipment and post-shipment credit.
What changed
The ceiling rate on export credit in foreign currency was revised upward from LIBOR plus 75 basis points to LIBOR plus 100 basis points, effective immediately. Similar adjustments apply where EURO LIBOR or EURIBOR is used as the benchmark. The revision covers both new and existing advances for their remaining tenure.
What it means for you
Banks can now charge up to 100 bps over LIBOR for export credit in foreign currency, up from 75 bps, allowing higher margins on these loans. This change, based on a working group recommendation, aims to align rates with market conditions and may improve banks' profitability on export credit portfolios. Existing advances will also see rate adjustments for the remaining period, impacting borrowers' costs.
Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.
What banks were required to do at the time
Update your bank's lending rates for export credit in foreign currency to the new ceiling of LIBOR + 100 bps immediately.
Apply the revised rates to both fresh advances and existing advances for the remaining period, as directed.
Ensure systems reflect the change for EURO LIBOR/EURIBOR benchmarks as well.
Communicate the rate revision to relevant branches and export credit teams for compliance.
Who it affects
Commercial banks offering export credit in foreign currency, Exporters availing pre-shipment or post-shipment credit in foreign currency, Bank treasury and credit departments handling LIBOR-linked products
❓ Common questions
Regulatory timeline
Stated effective dateeffective April 18, 2006
Decoded by BankPulse2026-06-19 18:41 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn05 Aug 2026, 04:00 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
Does this revision apply to existing export credit advances?
Yes, the circular explicitly states that the revised ceiling rate applies to both fresh advances and existing advances for the remaining period of the loan.
What is the new ceiling rate for export credit in foreign currency?
The ceiling rate has been increased from LIBOR plus 75 basis points to LIBOR plus 100 basis points, effective April 18, 2006. For EURO LIBOR/EURIBOR benchmarks, the same spread applies.
Are there any exceptions to the ceiling rate for specific types of export credit?
Yes, for Export Credit Not Otherwise Specified (ECNOS), banks are free to decide the interest rate based on rupee credit rates, PLR, and spread guidelines, without the LIBOR ceiling.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed byRBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #2680: DBOD.DIR (Exp).BC.No.77/04.02.01/2005-06 — "Interest Rates on Export Credit in Foreign Currency" dated April 18, 2006”
📜 Read the original circular — full text as issued by RBI
RBI/2005-06/362
DBOD .DIR (Exp). No. 78/04.02.01/2005-06
April 18, 2006
All Commercial Banks
Dear Sir,
Interest Rates on Export Credit in Foreign Currency
Please refer to paragraph 113 of the Annual Policy Statement for the year 2006-07 enclosed to the Governor's letter No. MPD.BC.279/07.01.279/2005-06 dated April 18, 2006 relating to export credit in foreign currency.
2. On the basis of the recommendation of the Working Group to Review Export Credit, it has been decided to revise the ceiling rate on export credit in foreign currency by banks to LIBOR plus 100 basis points from the present ceiling rate of LIBOR plus 75 basis points with immediate effect . Similar changes may be effected in interest rates in cases where EURO LIBOR/EURIBOR have been used as the benchmark. The rates of interest applicable have been incorporated in the Annex to the DBOD.DIR. BC. No. 77/ 04.02.01/2005-06 dated April 18, 2006 enclosed to this circular.
3. The revision in the rates of interest would be applicable not only to fresh advances but also to the existing advances for the remaining period.
4. Please acknowledge receipt.
Yours faithfully,
( P. Vijaya Bhaskar )
Chief General Manager
DBOD.DIR (Exp).BC.No.77 / 04.02.01/ 2005-06
April 18, 2006
Interest Rates on Export Credit in Foreign Currency
In exercise of the powers conferred by Sections 21 and 35A of the Banking Regulation Act, 1949, the Reserve Bank of India, being satisfied that it is necessary and expedient in the public interest so to do, hereby directs that, with effect from April 18, 2006, the interest rates on export credit in foreign currency would be as indicated in the Annex enclosed to this Directive.
(Anand Sinha )
Executive Director
Annexure
Schedule of Interest Rates on Export Credit in Foreign Currency
of scheduled commercial banks effective from April 18, 2006
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2005-06/362 · issued 18 Apr 2006. The plain-English explanation above is BankPulse’s own independent summary.
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BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=2829&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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