As a part of its continuing efforts to simplify and liberalise the exchange control procedures, the Reserve Bank of India has introduced a revised procedure for short-term credit, for periods less than three years, for imports up to US $ 20 million per import transaction.

The Reserve Bank of India today announced that the banks authorised to deal in foreign exchange (authorised dealers) may permit importers in India to avail of short-term credit without any prior approval from the Reserve Bank. Accordingly, authorised dealers can now permit importers in India to avail short-term credit for periods less than three years without prior approval of the Reserve Bank, provided the amount does not exceed US $ 20 million per import transaction. The procedure has been amended with a view to simplifying and streamlining the procedures for imports in to India.

The Reserve Bank of India, Central Office, would continue to expeditiously deal with applications for short-term credit for amounts exceeding US $ 20 million per transaction irrespective of the period of the credit.

The Reserve Bank has also stated that the revised procedure would remain in operation till further notice. Necessary procedural details are being separately advised to the authorised dealers.

Presently, importers desirous of arranging short-term credit in foreign currency for payment of their import bills require prior approval from the Reserve Bank. Similarly, prior permission of the Reserve Bank is also required where the suppliers of goods from outside India extend short-term credit for payment of import bills.

Press Release : 2002-2003/327