Export Credit in Foreign Currency

RBI has deregulated the ceiling rate on export credit in foreign currency vide RBI Circular No. DBOD.DIR No. 100/04.02.001/2011-12 dated 4.5.2012.  Now banks have been allowed to freely determine their interest rates, on both borrowing (from overseas banks) and lending rates of export credit in foreign currency.  Ministry of Finance, Department of Financial Services (DoFS) have issued instructions to All Public Sector Banks / Private Sector Banks.  The banks have been advised that the foreign exchange available with them may be lent to exporters, either directly or through other small banks.  They have also been advised to give special focus on making the export credit in foreign currency available to micro and small sector exporters.  The communication issued by DoFS on 2^nd    July, 2012.