7A.12
- Document type
- Manual
- Dated
- Category
- Exchange Management Manual
Interest on Import Bills
Authorised dealers may make remittances on account of interest accrued on usance bills under normal interest clause or of overdue interest paid on sight bills for a period not exceeding six months from the date of shipment in respect of imports without prior approval of Reserve Bank. In case of pre-payment of usance import bills, remittances may be made only after reducing the proportionate interest for the unexpired portion of usance at the rate at which the interest has been claimed or the prime rate (or its equivalent) of the country in the currency of which the goods are invoiced, whichever is higher. Where interest is not separately claimed, remittances may be allowed after deducting the proportionate interest for the unexpired portion of usance at the prevailing prime rate.
NOTE : Interest under normal interest clause would mean interest at the prime rate (or its equivalent) of the country in the currency of which the goods are invoiced.