MANU/APDR/0019/2021

Ministry : Reserve Bank of India

Department/Board : Financial Markets Regulation Department

Circular No. : A. P. (DIR Series) Circular No. 13
                   RBI/2021-2022/101

Date : 28.09.2021

Notification/ Circulars Referred : FEMA 23(R)/2015-RB dated January 12, 2016 MANU/RFEM/0004/2016;Notification No. FEMA 23(R)/(5)/2021-RB dated September 08, 2021 MANU/RFEM/0003/2021

Subject: Banking

Industry: Finance

Citing Reference:
FEMA 23(R)/2015-RB dated January 12, 2016 MANU/RFEM/0004/2016  Referred

Notification No. FEMA 23(R)/(5)/2021-RB dated September 08, 2021 MANU/RFEM/0003/2021  Referred

To

All Category-I Authorised Dealer Banks

Use of any alternative reference rate in place of LIBOR for interest payable in respect of export / import transactions

Attention of Authorised Dealer Category- I banks (AD banks) is invited to extant Regulation 15 of Foreign Exchange Management (Export of Goods & Services) Regulations, 2015 notified vide FEMA 23(R)/2015-RB dated January 12, 2016 and various directions issued to AD banks from time to time prescribing LIBOR linked interest payable in respect of export/import transactions.

2. In view of the impending cessation of LIBOR as a benchmark rate, it has been decided to permit AD banks to use any other widely accepted/Alternative reference rate in the currency concerned for such transactions. All other instructions in this regard shall remain unchanged. The necessary enabling amendment to FEMA 23(R)/2015-RB has since been notified vide Notification No. FEMA 23(R)/(5)/2021-RB dated September 08, 2021 (copy enclosed).

3. AD banks may bring the contents of this circular to the notice of their constituents concerned.