Interest Equalization Scheme on Pre and Post Shipment Rupee Export Credit – Extension

DOR.STR.REC.93/04.02.001/2021-22 March 8, 2022

All Scheduled Commercial Banks (excluding RRBs), Small Finance Banks,
Primary (Urban) Cooperative Banks (scheduled banks having AD category-I license), and EXIM Bank

Dear Sir / Madam,

Interest Equalization Scheme on Pre and Post Shipment Rupee Export Credit – Extension

Please refer to the instructions issued vide circular DOR.CRE(DIR). REC.28/04.02.001/2021-22 dated July 1, 2021.

  1. Government of India has approved the extension of Interest Equalization Scheme for Pre and Post Shipment Rupee Export Credit (‘Scheme’) up to March 31, 2024 or till further review, whichever is earlier. The extension takes effect from October 1, 2021 and ends on March 31, 2024. The modifications made by the Government to the Scheme are detailed below:
    ‘Telecom Instruments’ sector having six HS lines1 shall be out of the purview of the Scheme, except for MSME manufacturer exporters.
    Revised interest equalisation rates under the Scheme will now be 3 per cent for MSME manufacturer exporters exporting under any HS lines, and 2 per cent for manufacturer exporters and merchant exporters exporting under 410 HS lines (after excluding 6 HS lines pertaining to Telecom Sector as mentioned above).
    Banks, while issuing approval to the exporter, will necessarily furnish i) the prevailing interest rate, ii) the interest subvention being provided, and iii) the net rate being charged to each exporter, so as to ensure transparency and greater accountability in the operation of the Scheme.

1 Refer Sr. No. 25 of Annex 1 and Sr. Nos. 277 and 330 to 334 of Annexure-A of the circular DBR.Dir.BC.No.62/04.02.001/2015-16 dated December 4, 2015 and circular DCBR.CO.SCB.Cir.No. 1/13.05.000/2015-16 dated February 11, 2016.

The extended Scheme will not be available to those beneficiaries who are availing the benefit under any Production Linked Incentive (PLI) scheme of the government.
  1. For the period from October 1, 2021 to March 31, 2022, banks shall identify the eligible exporters as per the Scheme, credit their accounts with the eligible amount of interest equalisation and submit sector-wise consolidated reimbursement claim for the said period to the Reserve Bank by April 30, 2022.
  2. With effect from April 1, 2022, banks shall reduce the interest rate charged to the eligible exporters upfront as per the guidelines and submit the claims in original within 15 days from the end of the respective month, with bank’s seal, and signed by authorised person, in the prescribed format, as modified (Annex I).
  3. Other provisions of the extant instructions issued by the Bank on the captioned Scheme shall remain unchanged.

Yours faithfully

(Manoranjan Mishra) Chief General Manager

Government of India Interest Equalisation Scheme for Pre & Post Shipment Rupee Export Credit- Sector-wise claims of Scheduled Commercial Banks/ EXIM Bank/Primary (Urban) Cooperative Banks for the month of ….. Amount (in Rs.) Note: All amounts should be rounded off to the nearest rupee 
    Sector (A) Total amount of interest equalisation reimbursement claimed Out of (A), amount of interest equalisation reimbursement claimed in respect of beneficiaries belonging to Scheduled Castes (SC) Out of (A), amount of interest equalisation reimbursement claimed in respect of beneficiaries belonging to Scheduled Tribes (ST) Out of (A), amount of interest equalisation reimbursement claimed in respect of exporters from North Eastern Region (NER) 
Process agriculture/Food items     
Carpet (Excl. Silk) Handmade     
Handloom Products     
Coir & Coir Manufactures     
Jute Raw, Yarn     
Other Jute Manufactures     
Readymade Garments and Made ups     
Fabric of all types     
10 Toys     
11 Sports Goods     
12 Paper, Stationary     
13 Cosmetics and Toiletries     
14 Leather Goods and footwear     
15 Ceramics and Allied Products     
16 Glass and Glassware     
17 Medical and Scientific Instruments     
18 Optical Frames, Lenses, Sunglasses Etc.     
19 Auto Components/Parts     
20 Bicycle & Parts     
21 Articles of Iron or Steel     
22 Misc. Articles of base metals     
23 Industrial Machinery, Electrical and Engineering items, 1C Engine, Machine tools, Parts     
24 Electrical Machinery and Equipment     
25 Telecom Instruments (only for MSME Manufacturer- Exporters)     
26 All items manufactured by MSMEs other than those covered above     
 Grand Total     

We certify having followed guidelines as stated in the RBI circular No. DOR.STR.REC.93/04.02.001/2021-22 dated March 8, 2022 while disbursing the above loans to eligible exporters. In particular, we also certify that while issuing approval to the exporter, we have furnished (i) the prevailing interest rate, (ii) the interest subvention being provided and (iii) the net rate being charged to each borrower.

(Name and stamp of authorised signatory of the bank) Dated :