Line of Credit facilitation enables financing of eligible Indian exports under FEMA directions, with prescribed shipment and commission rules.
The Exim Bank facility provides a Line of Credit to Afreximbank to finance eligible Indian exports under the Foreign Trade Policy, with prescribed time limits for opening letters of credit and disbursement. Shipments must be declared on GR/SDF forms. Conditional rules for payment of agency commission are specified, including prior approval, deduction from invoices, and impact on reimbursable amounts to negotiating banks. AD Category-I banks must notify exporters and facilitate remittances in compliance with prevailing instructions. Directions are issued under FEMA and remain subject to other legal permissions.

All-in-cost ceiling for trade credits increased, permitting higher cost over benchmark for specified maturities; effective immediately.
Revision of the all-in-cost ceiling for trade credits raises the permissible cost margin over the six-month LIBOR benchmark for imports, with distinct higher ceilings for maturities up to one year and for those over one year up to three years. The revised ceilings take effect immediately, will be reviewed according to international market conditions, and leave other aspects of trade credit policy unchanged; related regulatory amendments to the Foreign Exchange Management borrowing/lending regulations will follow separately.

External Commercial Borrowings liberalisation expands eligible end uses, permits onshore crediting of proceeds, and revises all in cost ceilings.
ECB policy now permits Automatic Route borrowings up to the prescribed single borrower annual ceiling for rupee and foreign currency expenditure on permissible end uses, removes the minimum average maturity requirement for certain large rupee infrastructure capital expenditure, and recognises payment for 3G spectrum as an eligible end use. Borrowers may park proceeds offshore or remit them to rupee accounts in India, subject to prohibitions on capital market, real estate and inter corporate investments. All in cost ceilings have been revised for specified maturity bands and SME unhedged FX exposures will be monitored; these changes are effective immediately under FEMA directions.

FII investment allocation flexibility allows unrestricted equity debt mix; holding limits for security receipts remain in force.
SEBI, with Government concurrence, dispensed with the prescribed allocation ratio for FIIs, allowing flexible allocation between equity and debt; FIIs investing solely in debt must form and register a dedicated debt fund with SEBI, and the existing tranche level holding limits for Security Receipts issued by Asset Reconstruction Companies continue to apply.

Special currency basket value revision re-designates rupee valuation and directs authorised banks to implement and notify constituents.
Revision of the rupee valuation of the special currency basket was prescribed with a new rupee value effective from a stated date; Authorised Dealer Category I banks are directed to apply the revised valuation and notify their constituents. The directions are issued under the Foreign Exchange Management Act and are without prejudice to other statutory permissions or approvals. The circular notes an earlier indicated rupee value that has been superseded by this revision.

Overseas foreign currency borrowing limit doubled for authorised dealer banks to expand permitted access to overseas funds.
Authorised Dealer Category I banks may borrow overseas in foreign currency from their Head Office, overseas branches and correspondents and take overdrafts in nostro accounts up to 50 per cent of unimpaired Tier I capital as at the close of the previous quarter or USD 10 million (or its equivalent), whichever is higher; specified borrowings for export credit, subordinated debt as Tier II capital, innovative perpetual debt instruments and those with specific approval remain outside this limit.

Line of Credit for export financing sets sourcing, shipment declaration and commission rules for eligible India exports under FEMA.
Exim Bank provided a Line of Credit of USD 20 million to Myanma Foreign Trade Bank to finance eligible goods, services and consultancy for an ACSR and galvanized iron wire plant in Myanmar; at least 85% of the contract price (excluding consultancy) must be supplied from India. The Credit Agreement is effective from September 19, 2008; LC and disbursement deadlines differ by contract type. Shipments must be declared on GR/SDF forms. No agency commission is payable under the LOC, though exporters may use their own funds or EEFC balances for commission payments subject to prevailing rules. Directions are issued under FEMA provisions.

Line of Credit supports export of Indian goods and services to finance Myanmar transmission projects, subject to FEMA compliance.
Exim Bank's Line of Credit finances exports of eligible goods and consultancy for specified Myanmar transmission projects, requiring compliance with India's Foreign Trade Policy and at least 85 per cent of contract value supplied from India; remaining non consultancy inputs may be procured abroad. The Credit Agreement is effective from September 19, 2008, with LC/disbursement deadlines of 48 months from project completion for project exports and 72 months from agreement execution for supply contracts.

External Commercial Borrowings policy: infrastructure definition expanded to include mining, exploration and refining, effective immediately.
The definition of the Infrastructure sector for External Commercial Borrowings (ECB) is expanded to include mining, exploration and refining with immediate effect; all other ECB policy parameters (Automatic Route conditions, eligible borrowers and recognised lenders, permitted end-uses, maturity, prepayment/refinancing and reporting) remain unchanged. Amendments to the Foreign Exchange Management (Borrowing or Lending in Foreign Exchange) Regulations, 2000 will be separately notified and AD Category I banks must inform their constituents. Directions are issued under the Foreign Exchange Management Act, 1999.

Line of Credit enables financing of eligible exports for technology transfer, subject to Indian-content and FEMA compliance.
A Line of Credit from Exim Bank to Mozambique finances eligible exports and consultancy for water drilling technology transfer; at least 85 per cent of contract value (excluding consultancy) must be supplied from India, with the balance permissible from outside India. The Credit Agreement fixes windows for opening Letters of Credit and disbursement for project and supply contracts. Shipments must be declared on GR/SDF forms. No agency commission is payable under the facility, though exporters may use their own funds or EEFC balances to pay commission in free foreign exchange subject to AD Category I bank compliance. Directions are issued under FEMA without prejudice to other statutory approvals.

Special currency basket revision adjusts rupee conversion value, requiring authorised banks to update compliance and notify constituents.
Revision of the special currency basket rupee value under the Deferred Payment Protocols notifies Authorised Dealer Category I banks of a revised rupee conversion value effective from the implementation date; banks must inform constituents and apply the revised conversion for relevant transactions. The direction is issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 and is without prejudice to other required permissions or approvals.

Foreign Currency Exchangeable Bonds allow overseas subscription and exchange into listed shares subject to RBI approval and end use limits.
The scheme permits Indian promoter group companies to issue Foreign Currency Exchangeable Bonds to non residents, exchangeable into equity of a listed Offered Company; issuers must hold the offered shares and meet FDI and market eligibility, subscribers must comply with FDI caps and approvals, proceeds may fund overseas investments or promoter group companies (subject to ECB end use restrictions and prohibitions on Indian capital market or real estate use), pricing follows specified averaging floors, minimum five year maturity, physical share delivery on exchange, and prior RBI approval and ECB reporting are required.

External Commercial Borrowings policy liberalisation increases rupee-expenditure limit for infrastructure borrowers, imposing longer maturity and higher cost ceilings.
The circular liberalises External Commercial Borrowings by increasing the rupee-expenditure ceiling for infrastructure borrowers under the Approval Route and requiring a longer minimum average maturity for amounts exceeding the prior sub-limit. It also raises the all-in-cost ceiling for the longest maturity category while keeping other maturity ceilings and other ECB framework provisions unchanged; amendments take immediate effect and regulatory changes to the Foreign Exchange Management Regulations will follow.

Interest rate cap on NRE deposits ties fresh term deposit rates to LIBOR/SWAP plus a fixed margin.
Interest rates on fresh Non-Resident (External) Rupee (NRE) term deposits for one to three years' maturity shall not exceed the LIBOR/SWAP rates for corresponding US dollar maturities plus fifty basis points, as on the last working day of the previous month; the three year rate applies to maturities exceeding three years and to renewals, with other NRI deposit terms unchanged.

Interest rate ceiling on FCNR(B) deposits set against LIBOR/SWAP with a reduced margin and six month reset for floating rates.
Interest on FCNR (B) deposits with AD Category-I UCBs shall be payable within a ceiling equal to the applicable LIBOR/SWAP benchmark rate minus a reduced margin; floating rate deposits are capped against the applicable SWAP rate minus the same margin, with interest resets every six months. All other terms and conditions of FCNR (B) deposits remain unchanged.

Advance remittance limits for import of services relaxed, bank guarantees required above higher threshold and beneficiary obligations enforced.
Advance remittances for import of services may be made without a bank guarantee up to a raised threshold, with AD Category I banks authorised to adopt Board approved guidelines for such cases; amounts exceeding that threshold require a guarantee from an internationally reputed overseas bank or an AD Category I bank in India backed by an overseas counter guarantee. AD Category I banks must ensure beneficiaries perform contractual obligations and repatriate funds if obligations are not met.

Overseas investment documentation: designated AD banks to retain share certificates and certify in APR form.
Share certificates or other documentary evidence of acquisition of foreign securities need not be submitted to the Reserve Bank; instead such documents shall be submitted to and retained by the designated AD Category I bank, which must monitor and verify their bonafides and submit a certificate to the Reserve Bank as an annexure to the APR (Part III of Form ODI).

Direct receipt of import documents expanded, allowing bank remittances with KYC/AML compliance and due diligence safeguards.
AD Category - I banks may make remittances when import bills/documents are received directly from overseas suppliers, subject to an increased transaction limit and safeguards: adherence to the Foreign Trade Policy; customer accounts compliant with KYC/AML guidelines; bank-conducted due diligence on importer financial standing and trade customarity; and Suspicious Transaction Report filing where doubts about genuineness arise. Existing instructions for status holder exporters and specified exemptions for non-status holder exporters continue. The directions are issued under foreign exchange law and do not affect other statutory permissions.

Suppliers' and Buyers' credit now subject to shortened maturity for imports of platinum, palladium, rhodium and silver.
Suppliers' and Buyers' credit and the usance period of letters of credit for imports of platinum, palladium, rhodium and silver are subject to a shortened maturity measured from shipment, effective immediately; AD Category I banks must perform due diligence, comply with KYC and AML guidelines, investigate large or abnormal volume increases for bonafides and arbitrage risk, and continue to follow other existing import instructions under FEMA.

Vostro account branch cap relaxation allows additional drawee branches with CBS and online monitoring, subject to approvals.
The Reserve Bank permits AD Category I banks to designate drawee branches under Rupee Drawing Arrangements beyond the earlier numerical cap where those branches operate on a Core Banking Solution with on line funds monitoring to prevent concealed overdrafts, subject to Reserve Bank approval for the tie up with an Exchange House, adherence to Rupee Drawing Arrangements instructions, and prior Board approval before increasing drawee branches; prior permission requirements for tie ups remain unchanged.