Entrepreneurs in the private industrial sector arranging foreign credit in the form of loans, suppliers' credit, PAYE scheme etc. falling within the following guidelines are not required to obtain prior approval from BOI for contracting such credit:

• The effective rate of interest should not exceed LIBOR*+4% (effective interest is the sum of the stated annual rate of interest and the annualized fees such as commitment fee, syndication fee, front-end fee, project appraisal fee etc.)
• The down payment, if any, in case of suppliers' credit should not exceed 10% of the credit amount.
• Repayment period should not be less than seven years.

A copy of the foreign loan agreement signed by both parties should be submitted to BOI for registration. Periodic approval of BOI is required for the proposals which do not fall within the aforesaid guidelines.

*LIBOR=London Interbank Offered Rate