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.

4. The directions contained in this circular have been issued under Section 10(4) and Section 11(1) of the FEMA, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.

Yours faithfully,
(R. S. Amar)
Chief General Manager