Swap Facility for Expansion of Export Credit in Foreign Currency

A US Dollar-Rupee swap facility has been introduced to support incremental Pre-shipment Export Credit in Foreign Currency (PCFC). Scheduled banks (excluding RRBs) have the option to access rupee refinance to the extent of the swap with RBI under a special export credit refinance facility. The salient features of the new swap facility are as under:

(a) The swap facility will be available to scheduled banks (excluding RRBs) from January 21, 2013 till June 28, 2013 for fixed tenor of 3/6 months.

(b) Under the swap arrangement, a bank can buy US Dollars, up to its eligible swap limit, from RBI and simultaneously sell the same amount of US Dollar forward as per the term of the swap at the prevailing market rates for swaps of similar tenor.

(c) Banks desirous of availing the swap facility will have to furnish a declaration duly signed by their authorised signatories that they have actually disbursed the eligible incremental PCFC during the preceding month (s).

(d) The swap facility will be operationalised by the Financial Markets Department of the Bank at Mumbai.

(e) Banks desirous of availing refinance under special export credit refinance facility may approach the Regional Office of the RBI at Fort, Mumbai with the required promissory note and a declaration indicating that they have availed the swap facility and the amount of refinance sought does not exceed the amount of swap outstanding under the swap facility.

(f) The new scheme comes into effect on January 21, 2013.

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