What changed
The all-in-cost ceiling for trade credits for imports, previously set in September 2012, will continue unchanged until June 30, 2013. After that date, the ceiling will be reviewed again. All other trade credit rules remain the same.
What it means for you
Banks and importers can continue using the same cost limits for trade credits without any immediate adjustment. This provides short-term stability for financing imports, but lenders should prepare for a possible revision after June 30. No new compliance or reporting requirements are introduced.
What you must do
- Inform your constituents and customers about the extended all-in-cost ceiling validity.
- Continue applying the existing all-in-cost ceiling as per earlier circulars until June 30, 2013.
- Monitor RBI announcements for any post-June 2013 review outcomes.
Who it affects
AD Category-I banks, Importers using trade credits, Trade finance departments
What is the all-in-cost ceiling for trade credits?
The ceiling is the maximum total cost (including interest and fees) allowed for trade credits for imports, as specified in earlier RBI circulars. This circular extends that ceiling unchanged until June 30, 2013.
Do I need to submit any new reports to RBI?
No. This circular only extends the existing ceiling; no new reporting or documentation requirements are introduced.
What happens after June 30, 2013?
RBI will review the all-in-cost ceiling after June 30, 2013. Banks should watch for further circulars on any changes.