Sub: Amendments in the Interest Equalization Scheme for Pre and Post Shipment Rupee Export Credit Scheme – reg.

 

Dear All,

As you are aware that Government has allowed the extension of the Interest Equalization Scheme for Pre and Post Shipment Rupee Export Credit (‘Scheme’) up to June 30, 2024. Under the scheme, 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.

RBI vide its notification no. RBI/2023-24/124 DOR.STR.REC.78/04.02.001/2023-24 dated February 22, 2024 has notified the below given changes:

• 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. DGFT will identify all such banks and those will be restricted from participating in the scheme till they furnish an undertaking to DGFT.

• Cap on Subvention Amount: The annual net subvention amount has been already capped at Rs 10 Cr per Importer-Exporter Code (IEC) in a given financial year and the same has been communicated to the trade & industry and banks vide DGFT Trade Notice No.05 dated May 25, 2023. Accordingly, all disbursement from April 1, 2023 shall be reckoned for this purpose.

It is to be noted that all other provisions of the aforesaid circulars shall remain unchanged.

Members may please note that above changes.

Thanking you,

Yours faithfully,

Chandrima Chatterjee

Secretary General