Rupee denominated trade credit authorized with specified tenors and bank safeguards for import finance. Notification permits resident importers to raise Rupee (INR) denominated trade credit from overseas lenders under a loan agreement for imports (except gold). Tenors: non capital goods up to one year from shipment or the operating cycle, capital goods up to five years; no roll overs beyond permitted periods. AD Category - I banks may approve trade credit subject to a per transaction ceiling of USD 20 million equivalent, may provide guarantees/LOUs/letters of comfort for up to three years, and must ensure all in costs are market commensurate. Overseas lenders may hedge Rupee exposure in the on shore market through permitted derivatives; hedging guidelines to follow.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Rupee denominated trade credit authorized with specified tenors and bank safeguards for import finance.
Notification permits resident importers to raise Rupee (INR) denominated trade credit from overseas lenders under a loan agreement for imports (except gold). Tenors: non capital goods up to one year from shipment or the operating cycle, capital goods up to five years; no roll overs beyond permitted periods. AD Category - I banks may approve trade credit subject to a per transaction ceiling of USD 20 million equivalent, may provide guarantees/LOUs/letters of comfort for up to three years, and must ensure all in costs are market commensurate. Overseas lenders may hedge Rupee exposure in the on shore market through permitted derivatives; hedging guidelines to follow.
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