MANU/RMIC/0019/2024

Ministry : Reserve Bank of India

Department/Board : Department of Regulation

Circular No. : DOR.STR.REC.78/04.02.001/2023-2024
                   RBI/2023-2024/124

Date : 22.02.2024

Notification/ Circulars Referred : Circulars No. DOR.STR.REC.93/04.02.001/2021- 22 dated March 8, 2022 MANU/RMIC/0032/2022;DOR.STR.REC.39/04.02.001/2022-23 dated May 31, 2022 MANU/RMIC/0101/2022 Circulars No. DOR.STR.REC.93/04.02.001/2021- 22 dated March 8, 2022 MANU/RMIC/0032/2022;DOR.STR.REC.39/04.02.001/2022-23 dated May 31, 2022 MANU/RMIC/0101/2022

Citing Reference:
Circulars No. DOR.STR.REC.93/04.02.001/2021- 22 dated March 8, 2022 MANU/RMIC/0032/2022  Referred

DOR.STR.REC.39/04.02.001/2022-23 dated May 31, 2022 MANU/RMIC/0101/2022  Referred

Circulars No. DOR.STR.REC.93/04.02.001/2021- 22 dated March 8, 2022 MANU/RMIC/0032/2022  Referred

DOR.STR.REC.39/04.02.001/2022-23 dated May 31, 2022 MANU/RMIC/0101/2022  Referred

All Scheduled Commercial Banks (excluding RRBs),
Primary (Urban) Cooperative Banks & State Cooperative Banks (scheduled banks having AD category-I license), and Exim Bank

Dear Sir/Madam,

Interest Equalization Scheme (IES) on Pre and Post Shipment Rupee Export Credit

1. Please refer to the instructions issued vide circulars No. DOR.STR.REC.93/04.02.001/2021- 22 dated March 8, 2022 and DOR.STR.REC.39/04.02.001/2022-23 dated May 31, 2022.

2. Government of India has allowed for extension of the Interest Equalization Scheme for Pre and Post Shipment Rupee Export Credit ('Scheme') up to June 30, 2024. The rate of interest equalization shall be 2% for Manufacturers and Merchant Exporters exporting under specified 410 HS lines and 3% to the MSME manufacturers exporting under any HS line.

3. Further, Government has advised the following modifications to the scheme:

a) Average interest rate: With effect from FY 2023-24, the banks which have priced the loans covered under this scheme at an average interest rate of greater than Repo Rate + 4% prior to subvention would be subjected to certain restrictions under the scheme. Based on an assessment undertaken for FY 2023-24, Director General of Foreign Trade (DGFT) will identify the banks which are in breach of the above provision. Such banks shall be restricted ........