RBI/2009-10/121
DBS.CO.IPC.BC.3/12.01.001/2009-10
August 14, 2009
All Scheduled Commercial Banks
(excluding RRBs)
Dear Sir / Madam,
Rupee Export Credit - Interest Rate Subvention
As you are aware, the scheme of providing interest rate subvention to all
scheduled commercial banks in respect of rupee export credit to specified
categories of exports was formulated by Government of India and the operative
instructions in this regard have been issued by Reserve Bank of India. In this
connection, we invite your attention to para 4.3 of the Master Circular
DBOD.No.DIR.(Exp).BC.07/04.02.02/2009-10 dated July 1, 2009, which requires
banks to pass on the benefit of 2 percent / 4 percent interest subvention
completely to the eligible exporters upfront and submit the claims to RBI for
reimbursement duly certified by the independent auditor. However, it has come to
our notice that the benefit of subvention by reducing the interest rates upfront
as envisaged under the scheme has not been passed on to the exporters by some
banks or there has been delay, even though the banks have furnished
certificates, while claiming subvention that they have disbursed the loans at
the reduced rates to the eligible exporters.
- In view of the above, banks are advised to ensure strict adherence to the
extant instructions and initiate corrective measures to ensure strict compliance
to the guidelines. Further, the banks may examine the wrong certification, if
any, by the auditors and take appropriate action under advice to us.
Yours faithfully,
(S.Karuppasamy)
Chief General Manager-in-Charge