March 11, 2002
Phalguna 20, Saka 1923

Ref.No.MPD. 212 / 07.01.279/2001-02

To
All Scheduled Commercial Banks

Dear Sirs,

Interest Rate Ceilings on Rupee Export Credit

On September 24, 2001, it was decided to effect reduction in the ceiling of interest rates charged by scheduled commercial banks on pre-shipment and post-shipment rupee export credit by one percentage point across the board with effect from September 26, 2001. It was also mentioned that this dispensation is valid upto March 31, 2002.

2. Considering subsequent developments, this facility is extended for a further period of six months. Thus, the validity of the reduction in the interest rates on export credit announced on September 24, 2001, would remain in force up to September 30, 2002.

A communication to banks will be sent separately.

3. Kindly acknowledge receipt of this letter.

Yours faithfully,

( D.V.S. Sastry )
Adviser-in-Charge

Annexure

Interest Rate Ceilings on Export Credit of Scheduled Commercial Banks

Category	With effect from April 1, 2002 (Up to September 30, 2002)
Pre-shipment credit
(i) Up to 180 days	Not exceeding PLR minus 2.5 percentage points
(ii) Beyond 180 days and up to 270 days	Not exceeding PLR plus 0.5 percentage points
Post-shipment Credit
(a) On demand bills for transit period (as specified by FEDAI)	Not exceeding PLR minus 2.5 percentage points
(b) Usance Bills
(i) Up to 90 days	Not exceeding PLR minus 2.5 percentage points
(ii) Beyond 90 days and up to 6 months from date of shipment	Not exceeding PLR plus 0.5 percentage points

Note: Since these are ceiling rates, banks would be free to charge any rate below the ceiling rates.