RBI opens $6.5-bn swap facility for banks to boost export credit

The Reserve Bank of India (RBI) has opened a special $6.5 billion facility to provide export credit, under which banks would be allowed to borrow dollar under a swap facility.

The RBI said the special dollar-rupee swap facility would support incremental pre-shipment export credit in foreign currency (PCFC) by banks.

Scheduled banks, excluding regional rural banks (RRBs), can access rupee refinance to the extent of the swap with the RBI under the special export credit refinance facility, RBI said in a release today.

Beginning 21 January, banks can borrow dollars from the RBI under the swap facility for a fixed tenor of 3 to 6 months till 28 June.

The number of such borrowings a bank can avail of would be equal to the incremental PCFC disbursed with reference to a base date (say 30 November 2012), subject to a limit, RBI said, adding that the limits would be communicated to eligible individual banks separately.

The limits would be reviewed periodically based on actual utilisation and other relevant factors, RBI said.