The Reserve Bank of India (RBI) on February 22, 2024, issued a notification regarding the Interest Equalization Scheme on Pre and Post-Shipment Rupee Export Credit.
This has a reference to the circular 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.
The following has been modified namely: -
• Average interest rate: With effect from FY 2023-24, the banks that 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, the Director General of Foreign Trade (DGFT) will identify the banks which are in breach of the above provision. Such banks shall be restricted from participating in the scheme till they furnish an undertaking to DGFT. Any further breach as assessed by DGFT thereafter may lead to debarment from the scheme.
• Cap on subvention amount: The annual net subvention amount has already been 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 disbursements from April 01, 2023, shall be reckoned for this purpose.
It further states that All other provisions of the aforesaid circulars shall remain unchanged.
[Notification No. RBI/2023-24/124 DOR.STR.REC.78/04.02.001/2023-24]
