Sep 30, 2021

Use of Alternative Reference Rates in Place of LIBOR

In view of the impending cessation of London Interbank Offered Rate (‘LIBOR’) as the benchmark rate, the RBI by way of Notification dated September 8, 2021, amended Regulation 15 of the Foreign Exchange Management (Export of Goods and Services) Regulation, 2016 to provide that the rate of interest, if any, payable on the advance payment will not exceed 100 basis points above the LIBOR or other applicable benchmark as may be directed by the RBI, as the case may be. Accordingly, the RBI has by its Circular dated September 28, 2021, bearing reference A.P. (DIR Series) Circular No.13, permitted authorized dealer banks to use any other widely accepted / alternative reference rates of interest for export / import transactions.




These are the views and opinions of the author(s) and do not necessarily reflect the views of the Firm. This article is intended for general information only and does not constitute legal or other advice and you acknowledge that there is no relationship (implied, legal or fiduciary) between you and the author/AZB. AZB does not claim that the article's content or information is accurate, correct or complete, and disclaims all liability for any loss or damage caused through error or omission.