The Reserve Bank of India (“RBI”) vide its notification dated December 8, 2021 (“Notification”) has introduced certain changes with respect to paragraph 1.5, 2.1.vi. and 14.vi. of the Master Direction on ‘External Commercial Borrowings, Trade Credits and Structured Obligations” dated March 26, 2019 (“Master Direction”), prescribing the benchmark rates and the maximum spread over benchmark for calculating the all-in-cost for foreign currency (“FCY”) External Commercial Borrowings (“ECBs”) and Trade Credits (“TCs”).
Changes to the all-in-cost benchmark and ceiling for FCY ECBs/ TCs, in view of the imminent discontinuance of LIBOR as a benchmark rate, introduced by the Notification are as specified below:
Please note that there is no change in the all-in-cost benchmark and ceiling for INR ECBs/ TCs.
This update has been contributed by Nidhi Arya (Partner) and Swaraj Narula (Senior Associate).
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