The Reserve bank of India (RBI) has liberalised the exchange control procedure for short-term credit by allowing importers to raise up to $20 million per import transaction for period less than three years.
The RBI has said that banks authorised to deal in foreign exchange may permit importers to avail of short-term credit without any approval from the central bank.
The importers currently are required to take approval from RBI to arrange short-term credit in foreign currency loans for payment of their import bills.
The authorised dealers can permit importers in India to avail of a short-term credit for periods less than three years without prior RBI approval, provided the amount does not exceed $20 million per import transaction.
The RBI said that the procedure has been amended with a view to simplify and streamline procedure for imports into India.
The RBI has the last few months been relaxing exchange control norms on the back of increased forex reserves in the country.
The forex reserves in the country are currently pegged at more than $62 billion and still rising on improved exports and remittances from overseas.
The government had last week allowed domestic firms to borrow up to $50 million from global sources without its approval. It has also permitted the pre-payment of foreign loans ahead of schedule up to March 31, 2003, without any limit.
