In Foreign Exchange,
ON USANCE BASIS
of the Authorized Dealers is invited to F.E.
Circular No. 12 dated the 27th May, 1997
in terms of which usance imports can be made on the basis
of letters of credit/contracts envisaging prices quoted
on spot basis and payment of interest separately at a rate
not exceeding the relevant LIBOR + 1.5%.
Enquiries have been received whether LIBOR prevailing on
the date of issuance of letter of credit or on the date
of shipment/drawl of Bill of Exchange will apply for the
purpose of payment of interest. It should be noted that
LIBOR obtaining on the date of drawl of bill of exchange
will be used for the purpose.
It should also be noted that the facility of import of usance
basis is not available to sugar. The instructions contained
in F.E. Circular No.15 of 1986 will, inter-alia, continue
to apply for the import of sugar.
Please bring the above to the notice of your constituents.