RBI cuts export credit ceiling rate by 150 basis points

RBI cuts export credit ceiling rate by 150 basis points

The Reserve Bank of India has reduced the ceiling rate on export credit in foreign currency by banks to LIBOR plus 200 basis points with immediate effect.   The prevailing interest rates on export accredit was LIBOR plus 350 basis points. The reduction in the rate was subject to the express condition that the banks will not levy any other charges such as service charge and management charge except for recovery towards out of pocket expenses incurred. Similar changes may be effected in interest rates in cases where EURO LIBOR/EURIBOR has been used as the benchmark RBI said in a circular in Mumbai Friday.    The revision in the rates of interest would be applicable only to fresh advances.    The ceiling interest rate on the lines of credit with overseas banks has also been reduced from six months LIBOR/EURO LIBOR/EURIBOR plus 150 basis points to six months LIBOR/ EURO LIBOR/EURIBOR plus 100 basis points with immediate effect.