What changed
The all-in-cost ceiling for trade credits for imports, originally set in September 2012, will remain in force until March 31, 2014. This extends the previous deadline that was due for review. All other trade credit rules stay the same.
What it means for you
Banks and importers can continue using the same cost limits for trade credits without any immediate revision. This provides stability for financing imports, as the ceiling on interest and fees remains unchanged. Lenders should note that a review is scheduled after March 2014, so future adjustments are possible.
What you must do
- Inform your AD Category-I bank customers about the extended all-in-cost ceiling validity.
- Continue applying the existing all-in-cost ceiling as per the September 2012 circular until March 31, 2014.
- Monitor for any future RBI review after March 2014 that may change the ceiling.
Who it affects
All Authorised Dealer Category-I Banks, Importers using trade credits, Corporate customers of AD banks
What is the all-in-cost ceiling for trade credits?
It is the maximum total cost (interest plus fees) that can be charged on trade credits for imports into India, as specified in earlier RBI circulars.
Does this circular change any other trade credit rules?
No, all other aspects of trade credit policy remain unchanged as per the circular.
When will the ceiling be reviewed again?
The ceiling will be reviewed after March 31, 2014, as stated in the circular.