RBI F. No. FEMA 23(R)/(5)/2021-RB. Dtd. 08th September, 2021
The Foreign Exchange Department of the RBI has notified a set of regulations to amend the existing Foreign Exchange Management (Export of Goods and Services) Regulations, 2015 which shall come into force as on the date of its publication in the Official Gazette.
Amendment: Substitution Regulation 15(1)(ii)-
“ii) the rate of interest, if any, payable on the advance payment shall not exceed 100 basis points above the London Inter-Bank Offered Rate (LIBOR) or other applicable benchmark as may be directed by the Reserve Bank, as the case may be; and”
The amendment is introduced in Regulation 15 which basically talks about advance payment against exports and related obligations of an exporter. One of such obligation relates to the rate of interest on advance payment.
In the existing provisions, it was provided that the exporter has to ensure that the rate of interest, if any, payable on the advance payment does not exceed the rate of interest London Inter-Bank Offered Rate (LIBOR) + 100 basis points.
In regards to the same, it is provided in the amendment that the RBI may also specify any other benchmark for the purpose of fixing rate of interest.
The entire contents of this article are solely for information purpose and have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation by the Author. Compliance Calendar LLP and the Author of this Article do not constitute any sort of professional advice or a formal recommendation. The author has undertaken utmost care to disseminate the true and correct view and doesn’t accept liability for any errors or omissions. You are kindly requested to verify and confirm the updates from the genuine sources before acting on any of the information’s provided hereinabove. Compliance Calendar LLP shall not be responsible for any loss or damage in any circumstances whatsoever.