foreign currency term loan

foreign currency term loan

In simple words, FCTL is the replacement for Term Loan in INR.Foreign Currency Term Loans (FCTL) can be disbursed in four currencies viz. US$, Sterling, Euro and Japanese Yen with a maturity period of 6 months to 7 years. It can be repaid by bullet payment or in stipulated instalments or by conversion of rupee term loans, as per the terms of the original sanction. It is Financially Viable to the client(s) who are naturally hedged (ideally should have recurring / running business for Fx Inflows). Thus, a regular Exporter can repay through Export receivables. This FCTL $ liability creates a natural hedge against a $ receivable asset.