RBI Relaxes Trade Credit Norms

Relaxing norms to raise funds from abroad, the Reserve Bank of India, on Tuesday, said all types of companies can now avail themselves of trade credit facility from overseas for import of capital goods.

“On a review, it has been decided to allow companies in all sectors to avail of trade credit not exceeding $20 million up to a maximum period of five years for import of capital goods as classified by the Director General of Foreign Trade (DGFT),” the RBI said in a notification.

Earlier, only companies in the infrastructure sector were allowed to raise such trade credits.

The RBI further said that the ab-initio contract period of 15 months for all trade credits has been relaxed to 6 months.

All other aspects of trade credit policy, the RBI said, will remain unchanged and should be complied with. The amended policy has come into force with immediate effect.

Business line, New Delhi, 25-09-2013