October 11, 2011
All Scheduled Commercial Banks
Dear Sir/ Madam,
Rupee Export Credit Interest Rates
Please refer to our circulars DBOD.Dir.(Exp).BC.No.94/04.02.001/2009-10 dated April 23, 2010 and DBOD.Dir.(Exp).BC.No.36/04.02.001/2010-11 dated August 9, 2010 extending the scheme of interest subvention of 2% from April 1, 2010 to March 31, 2011 on pre and post shipment rupee export credit for certain employment oriented export sectors. Banks were also advised vide our circular DBOD.Dir.(Exp).BC.No.115/04.02.01/2009-10 dated June 29, 2010 that with the change over to the Base Rate System, the interest rates applicable for all tenors of rupee export credit advances with effect from July 1, 2010 will be at or above Base Rate in respect of all fresh / renewed advances.
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, 2011 to March 31, 2012 on the same terms and conditions to the following sectors:
iv. Small and Medium Enterprises (SMEs)( as defined in Annex)
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.37/04.02.001/2011-12 dated October 11, 2011 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-inCharge, Department of Banking Operations and Development, Reserve Bank of India, Central Office, 13th floor, Shahid Bhagat Singh Marg, Fort, Mumbai - 400001.
(P. R. Ravi Mohan)
Chief General Manager