Interest subvention scheme extended up to 31.03.2014 & to Engineering Sectors

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RBI/2012-13/376
DBOD.Dir.(Exp)BC.No.70/04.02.001/2012-13

January 14, 2013

All Scheduled Commercial Banks
(excluding RRBs)
Dear Sir/ Madam,
Rupee Export Credit – Interest Subvention

Please refer to our circular DBOD.Dir.(Exp).BC.No.112/04.02.001/2011-12 dated June 19, 2012 wherein interest subvention of 2% was extended w.e.f. April 1, 2012 to March 31, 2013 on pre and post shipment rupee export credit for certain employment orientated export sectors.

2. In this connection, the Government of India has decided to widen the scheme to include certain items covering the Engineering Sectors. The Scheme will be made available to the Engineering Sector on pre and post shipment export credit on the same terms and conditions as available to other sectors. A list of 134 tariff lines of Engineering products approved for inclusion in Interest Subvention for the period January 1, 2013 to March 31, 2013 is enclosed to this circular (Annex I).

3. Further, it has also been decided to extend the 2% Rupee Export Credit Interest Rate Subvention Scheme for the following sectors w.e.f. April 1, 2013 to March 31, 2014 on the same terms and conditions:

1. Handicrafts
2. Carpet
3. Handlooms
4. Small and Medium Enterprises (SMEs) (as defined in Annex II)
5. Readymade Garments
6. Processed Agriculture Products
7. Sports Goods
8. Toys
9. 134 Tariff lines on Engineering Goods (as per Annex I).

4. 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.

5. A directive No. DBOD.Dir.(Exp).BC.No.69/04.02.01/2012-13 dated January 14, 2013 issued in this regard is enclosed.

6. The procedure for claiming subvention is as follows:

1. The amount of subvention would be reimbursed on the basis of claim submitted as at the end of respective quarters in the format enclosed.
2. 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.
3. 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.
4. Claims may be submitted in the format given in Annex III 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.
5. In case no interest subvention is paid for any quarter/s, a NIL statement may be submitted.

Yours faithfully,
(Sudha Damodar)
Chief General Manager