Home › Circulars › RBI/2005-06/194

RBI extends lower export credit interest rate ceiling till April 2006

No longer current — withdrawn, no replacement on file yet

Source: Reserve Bank of India · RBI/2005-06/194 · issued 28 Oct 2005 · ~2 min read

Quick answerRBI has extended the reduced interest rate ceiling on rupee export credit by six months, up to April 30, 2006. Pre-shipment credit up to 180 days and post-shipment credit up to 90 days will continue to be capped at BPLR minus 2.5 percentage points.

What changed

The earlier dispensation of a one percentage point reduction in the ceiling on interest rates for pre-shipment and post-shipment rupee export credit, linked to BPLR, was set to expire on October 31, 2005. RBI has now extended this benefit for another six months, from November 1, 2005, to April 30, 2006. The ceiling remains at BPLR minus 2.5 percentage points for the specified tenors.

What it means for you

Banks must continue to offer export credit at concessional rates, with the ceiling at BPLR minus 2.5 percentage points for pre-shipment credit up to 180 days and post-shipment credit up to 90 days. This extension supports exporters by keeping borrowing costs lower, but it also means banks' net interest margins on these loans remain compressed. Lenders are free to charge below the ceiling, so competition may drive rates even lower.

Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.

What banks were required to do at the time

Update your lending system to apply the BPLR minus 2.5 percentage points ceiling for pre-shipment credit up to 180 days and post-shipment credit up to 90 days from November 1, 2005.
Communicate the extended validity period (up to April 30, 2006) to your export credit processing teams and branches.
Ensure that for tenors beyond the specified limits, interest rates are set freely as per the circular.
Acknowledge receipt of the RBI circular as instructed.

Who it affects

All scheduled commercial banks offering rupee export credit, Exporters availing pre-shipment and post-shipment credit, Bank treasury and credit policy teams

❓ Common questions

Regulatory timeline

Decoded by BankPulse 2026-06-19 19:43 IST
Status change: withdrawn 09 Jul 2026, 04:04 IST

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

What is the new interest rate ceiling for pre-shipment rupee export credit?

For pre-shipment credit up to 180 days, the ceiling is BPLR minus 2.5 percentage points. For credit beyond 180 days and up to 270 days, banks are free to set rates.

How long is this extension valid?

The reduced ceiling rates are applicable from November 1, 2005, to April 30, 2006.

Can banks charge rates lower than the ceiling?

Yes, the circular states that since these are ceiling rates, banks are free to charge any rate below the ceiling.

📜 Read the original circular — full text as issued by RBI

Notifications - Reserve Bank of India Skip to main content Selected Selected Change Language हिंदी Search the Website Search Home About Us ▼ About Us Organisation & Functions ▶ Organisation Structure Departments Offices Training Establishment ▶ College of Agricultural Banking Reserve Bank Staff College College of Supervisors RBI's Functions and Working Governors Deputy Governors Executive Directors Communication Policy of RBI Sources of Information ▶ Annual Publications Half-yearly Publications Quarterly Publications Monthly Publications Weekly Publications Occasional Publications SDDS NSDP Data Releases Publications available on Subscription General Information RBI History Museum ▶ The RBI Museum RBI Monetary Museum Notification ▼ Notifications Master Directions Master Circulars Amendment Directions Draft Notifications/Guidelines ▶ Draft Notifications/Guidelines Draft Directions (RE-wise) Index To RBI Circulars Standalone Circulars Circulars Withdrawn Press Releases Speeches & Media Interactions ▼ Speeches Media Interactions Memorial Lectures Podcasts Publications ▼ Biennial Annual Half-Yearly Quarterly Bi-monthly Monthly Weekly Occasional Reports Working Papers Legal Framework ▼ Act Rules Regulations Schemes Research ▼ External Research Schemes RBI Occasional Papers Working Papers RBI Bulletin History DRG Studies KLEMS State Statistics and Finances Statistics ▼ Data Releases Database on Indian Economy Public Debt Statistics Regulatory Reporting ▼ List of Returns Data Definition Validation rules/ Taxonomy List of RBI Reporting Portals FAQs of RBI Reporting Portals Home Notifications Notifications ( 45 kb ) Interest Rate Ceiling on Rupee Export Credit RBI/2005-06/194 Ref.No.MPD.BC.276/07.01.279/2005-06 October 28, 2005 Kartika 6, 1927(Saka) To, All Scheduled Commercial Banks Dear Sir, Interest Rate Ceiling on Rupee Export Credit On September 24, 2001, it was decided to effect reduction in the ceiling of interest rates charged by scheduled commercial banks on pre-shipment and post-shipment rupee export credit by one percentage point (linked to BPLR) with effect from September 26, 2001. This dispensation was earlier extended up to October 31, 2005. 2.&#9;Subject to the review of the BPLR system afresh, as indicated in the Mid-term Review of the Annual Policy Statement for the year 2005-06 , it has been decided to extend the validity of the reduction in the interest rates (linked to BPLR) on pre-shipment rupee export credit up to 180 days and post-shipment rupee export credit up to 90 days announced on September 24, 2001 for a further period of six months up to April 30, 2006 ( Annex ). 3. Kindly acknowledge receipt. Yours faithfully, (K.Kanagasabapathy) Adviser-in-Charge Annex Category With effect from November 01, 2005 (up to April 30, 2006) Pre-shipment Rupee Export Credit &nbsp; (i) Up to 180 days Not exceeding BPLR minus 2.5 percentage points. (ii) Beyond 180 days and up to 270 days Free. &nbsp; &nbsp; Post-shipment Rupee Export Credit &nbsp; (a). On demand bills for transit period (as specified by FEDAI) Not exceeding BPLR minus 2.5 percentage points. (b) Usance bills &nbsp; (i) Up to 90 days Not exceeding BPLR minus 2.5 percentage points. (ii) Beyond 90 days and up to 6 months from the date of shipment Free. &nbsp; BPLR : Benchmark Prime Lending Rate Note : Since these are ceiling rates, banks would be free to charge any rate below the ceiling rates. 2026 All Months January February March April May June July August September October November December 2025 All Months January February March April May June July August September October November December 2024 All Months January February March April May June July August September October November December 2023 All Months January February March April May June July August September October November December 2022 All Months January February March April May June July August September October November December 2021 All Months January February March April May June July August September October November December 2020 All Months January February March April May June July August September October November December 2019 All Months January February March April May June July August September October November December 2018 All Months January February March April May June July August September October November December 2017 All Months January February March April May June July August September October November December Archives 2016 All Months January February March April May June July August September October November December 2015 All Months January February March April May June July August September October November December 2014 All Months January February March April May June July August September October November December 2013 All Months January February March April May June July August September October November December 2012 All Months January February March April May June July August September October November December 2011 All Months January February March April May June July August September October November December 2010 All Months January February March April May June July August September October November December 2009 All Months January February March April May June July August September October November December 2008 All Months January February March April May June July August September October November December 2007 All Months January February March April May June July August September October November December 2006 All Months January February March April May June July August September October November December 2005 All Months January February March April May June July August September October November December 2004 All Months January February March April May June July August September October November December 2003 All Months January February March April May June July August September October November December 2002 All Months January February March April May June July August September October November December 2001 All Months January February March April May June July August September October November December 2000 All Months January February March April May June July August September October November December 1999 All Months January February March April May June July August September October November December 1998 All Months January February March April May June July August September October November December 1997 All Months January February March April May June July August September October November December 1996 All Months January February March April May June July August September October November December 1995 All Months January February March April May June July August September October November December 1994 All Months January February March April May June July August September October November December 1993 All Months January February March April May June July August September October November December 1992 All Months January February March April May June July August September October November December 1991 All Months January February March April May June July August September October November December Top Back to previous page More Links : Bank Holidays Banking Glossary Citizen's Charter Complaints Contact Us COVID-19 Measures E-LMS Events FAQs Financial Education Forms IFSC/MICR Codes Important Websites Opportunities @ RBI RBI Clarifications RBI Kehta Hai RBI’s Vision and Values (1257 kb)--> Right to Information Act Tenders Follow RBI RSS Twitter YouTube Instagram Facebook LinkedIn &copy; Reserve Bank of India. 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Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2005-06/194 · issued 28 Oct 2005. The plain-English explanation above is BankPulse’s own independent summary.

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BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=2544&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.