The Reserve Bank of India (RBI) today announced the extension of the 2 per cent interest subsidy on rupee export credit to exports of labour-intensive and small-scale sectors to help them sustain in markets hit by the global slowdown.
The scheme of interest subvention of 2 per cent on rupee export credit will now be effective till 31 March 2012, on the same terms and conditions, to sectors such as handicrafts, handlooms, carpet as also small and medium enterprises (SMEs), RBI said in a notification.
Accordingly, banks will reduce the interest rate chargeable to exporters as per base rate system by the amount of subvention available, subject to a floor rate of 7 per cent. Banks will ensure passing on the benefit of 2 per cent interest subvention completely to eligible exporters, RBI said.
The amount of subvention would be reimbursed on the basis of claim submitted as at the end of respective quarters.
The amount of subvention will be calculated on the amount of export credit from the date of disbursement up to the date of repayment; or up to the date beyond which the outstanding export credit becomes overdue.
The claims should be accompanied by an external auditor's certificate certifying that the claims for subvention for the respective quarter are true and correct. Settlement of the claim will be done only on receipt of this certificate.
Claims should be submitted to the chief general manager-in-charge, department of banking operations and development, RBI said in its notification.