India extends Interest Equalisation Scheme until June 30

24 Feb '24

2 min read

Pic: Adobe Stock

Insights

India extends Interest Equalization Scheme until June 30, 2024, maintaining rates of 2 per cent for specified exporters and 3 per cent for MSMEs.
Modifications include bank-level compliance assessment by DGFT.
RBI caps annual net subvention at ₹10 crore per IEC from April 1, 2023, communicated in May 2023 circular.
All other provisions remain unchanged.

The Government of India has allowed for the extension of the Interest Equalisation Scheme for Pre and Post Shipment Rupee Export Credit until June 30, 2024. The rate of interest equalisation shall be 2 per cent for manufacturers and merchant exporters exporting under specified 410 HS lines and 3 per cent for MSME manufacturers exporting under any HS line.

The Reserve Bank of India issued a circular on February 22 to commercial banks of the country regarding this matter. The government has also advised a few modifications to the scheme. With effect from fiscal 2023-24, the Director-General of Foreign Trade (DGFT) will assess compliance with the provisions at the bank level for those who have priced the loans covered under the scheme. DGFT may restrict banks from participating in the scheme until they furnish the necessary details.

The RBI has informed the banks that the annual net subvention amount has already been capped at ₹10 crore per Importer-Exporter Code (IEC) in a given fiscal. This information was communicated to the trade and industry sectors, as well as to banks, in May 2023. All disbursements from April 1, 2023, shall be reckoned for this purpose accordingly. All other provisions of the aforementioned circulars shall remain unchanged.

Fibre2Fashion News Desk (KUL)

More Textiles News - India...