2% Interest subvention on rupee export credit wef April 1, 2012 to March 31, 2013

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RBI/2011-12/608
DBOD.Dir.(Exp).BC.No.112/04.02.001/2011-12

June 19, 2012

All Scheduled Commercial Banks
(excluding RRBs)

Dear Sir / Madam,

Rupee Export Credit Interest Rates

Please refer to our circular DBOD.Dir.(Exp).BC.No.38/04.02.001/2011-12 dated October 11, 2011 extending the scheme of interest subvention of 2% from April 1, 2011 to March 31, 2012 on pre and post shipment rupee export credit for certain employment oriented export sectors.

2. In this connection, the Government of India has decided to extend interest subvention of 2% on rupee export credit with effect from April 1, 2012 to March 31, 2013 on the same terms and conditions to the following sectors :

i. Handicrafts
ii. Carpet
iii. Handlooms
iv. Small and Medium Enterprises (SMEs) (as defined in Annex)
v. Readymade Garments
vi. Processed Agriculture Products
vii. Sport Goods
viii. Toys

3. Accordingly, banks may reduce the interest rate chargeable to the exporters as per Base Rate system in the above mentioned sectors eligible for export credit subvention by the amount of subvention available subject to a floor rate of 7%. Banks may ensure to pass on the benefit of 2% interest subvention completely to the eligible exporters.

4. A directive No. DBOD.Dir.(Exp).BC.No.111 /04.02.001/2011-12 dated June 19, 2012 issued in this regard is enclosed.

5. The procedure for claiming subvention is as follows :

i) The amount of subvention would be reimbursed on the basis of claim submitted as at the end of respective quarters in the format enclosed.

ii) The amount of subvention will be calculated on the amount of export credit from the date of disbursement

a. up to the date of repayment; or
b. up to the date beyond which the outstanding export credit becomes overdue.

iii) The claims should be accompanied by an External Auditor’s Certificate certifying that the claims for subvention of Rs…………….for the respective quarter is true and correct. Settlement of the claim will be done only on receipt of this certificate.

iv) Claims may be submitted in the enclosed format to the Chief General Manager-in-Charge, Department of Banking Operations and Development, Reserve Bank of India, Central Office, 13th floor, Shahid Bhagat Singh Marg, Fort, Mumbai – 400001, within one month from the end of the respective quarters.

v) In case no interest subvention is paid for any quarter/s, a NIL statement may be submitted.