Home › Circulars › RBI/2012-13/227

RBI Extends Interest Rate Cap on Overseas Lines of Credit

No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2012-13/227 · issued 27 Sep 2012 · ~1 min read
Quick answerRBI has extended the interest rate ceiling on lines of credit with overseas banks to six-month LIBOR/EURO LIBOR/EURIBOR plus 250 bps until further orders. This directive, issued under Sections 21 and 35A of the Banking Regulation Act, 1949, continues the existing cap without change.

What changed

RBI issued a directive on September 27, 2012, continuing the interest rate ceiling on lines of credit with overseas banks at six-month LIBOR/EURO LIBOR/EURIBOR plus 250 basis points. This extends the previous cap set in March 2012, with no change in the rate or spread.

What it means for you

Banks can continue pricing their overseas lines of credit at the same capped rate, ensuring cost predictability for cross-border borrowing. This stability helps lenders manage funding costs and maintain compliance with RBI's interest rate regulations.

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

Who it affects

Scheduled commercial banks (excluding RRBs), Treasury and international banking departments, Banks with cross-border credit lines

❓ Common questions

Regulatory timeline

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

What is the current interest rate ceiling on lines of credit with overseas banks?

The ceiling is six-month LIBOR/EURO LIBOR/EURIBOR plus 250 basis points, as per RBI's directive dated September 27, 2012.

Does this directive change the previous ceiling?

No, it continues the existing cap from March 2012 without any modification, until further orders.

Which banks are covered by this directive?

All scheduled commercial banks, excluding Regional Rural Banks (RRBs), are required to comply.

📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed by RBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #1220: DBOD.DIR.BC.No.45/04.02.001/2012-13 — "Notification on Interest Rate Ceiling on Lines of Credit with Overseas Banks" dated September 27, 2012”
📜 Read the original circular — full text as issued by RBI
RBI/2012-13/227 DBOD.DIR.No.46/04.02.001/2012-13 September 27, 2012 All Scheduled Commercial Banks (excluding RRBs) Dear Sir / Madam, Interest Rate Ceiling on Lines of Credit with Overseas Banks Please refer to our circulars DBOD. DIR. No. 52/04.02.001/2011-12 dated November 15, 2011 and DBOD. DIR. No. 91/04.02.001/2011-12 dated March 30, 2012 relating to interest rate ceiling on lines of credit with overseas banks. 2. It has been decided that the interest rate ceiling on lines of credit with overseas banks will continue to be six months LIBOR / EURO LIBOR / EURIBOR plus 250 basis points till further orders. 3. A directive DBOD.DIR.BC.No.45/04.02.001/2012-13 dated September 27, 2012 issued in this regard is enclosed . Yours faithfully, (Sudha Damodar) Chief General Manager DBOD.DIR.BC.No. 45 /04.02.001/2012-13 September 27, 2012 Interest Rate Ceiling on Lines of Credit with Overseas Banks 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, in continuation of directive DBOD.DIR.BC.No.90/04.02.001/2011-12 dated March 30, 2012 , the prescription regarding the interest rate ceiling on overseas line of credit will continue till further orders. (B. Mahapatra) Executive Director
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2012-13/227 · issued 27 Sep 2012. The plain-English explanation above is BankPulse’s own independent summary.
🧰 Tools — save, print, templates & related
Most relevant forTreasury Team / ALMCompliance TeamCorporate / Wholesale Banking RMRisk ManagementInternal AuditSenior Management / Board
🛠 Banker’s toolkit — checklists & reply templates →
Related circulars · Department of Regulation
SFB Pillar 3 Disclosure Norms Aligned with BaselUCB Deposit Rate Disclosure & Uniformity Rules UpdatedLAB Deposit Rate Disclosure & Uniformity Rules TightenedPayments Banks: Interest Rates Must Match Disclosed ScheduleRBI Updates Bulk Deposit Rate Rules and Disclosure Timing
Browse all departments →

💬 Banker Discussion

Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.

Loading comments…
BankPulse Compliance Evidence Pack — generated 03 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=7594&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.
Public beta — plain-English informational summaries. Always verify against the official RBI source (circular number cited on every page) before making compliance, credit, treasury, audit, or operational decisions. · Join our WhatsApp channel ↗
—