Rupee Export Credit Interest Rates
The Government of India has decided to extend Interest Subvention of 2 percentage points w.e.f. December 1, 2008 till March 31, 2009 on pre and post shipment rupee export credit, for certain employment oriented export sectors as under:
(i) Textiles (including Handloom)
(ii) Handicrafts
(iii) Carpets
(iv) Leather
(v) Gems and Jewellery
(vi) Marine Products, and
(vii) Small & Medium Enterprises
As per the existing guidelines, banks charge interest rate not exceeding BPLR minus 2.5 percentage points on rupee pre-shipment credit up to 270 days and post-shipment credit up to 180 days. Banks will now charge interest rate not exceeding BPLR minus 4.5 percentage points on pre-shipment credit up to 270 days and post-shipment credit up to 180 days on the outstanding amount for the period December 1, 2008 to March 31, 2009 to the above mentioned sectors. However, the total subvention will be subject to the condition that the interest rate, after subvention will not fall below 7 per cent which is the rate applicable to the agriculture sector under priority sector lending. The banks may ensure that the benefit of the 2 per cent interest subvention is passed on completely to the eligible exporters.