RBI Extends Export Credit Interest Rate Ceiling Till Oct 2007
No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2006-2007/319 · issued 12 Apr 2007 · ~2 min read
Quick answerRBI has extended the existing interest rate ceiling on rupee export credit—BPLR minus 2.5%—for pre-shipment (up to 180 days) and post-shipment (up to 90 days) credit until October 31, 2007. Banks must continue to apply this cap from May 1, 2007.
What changed
The earlier dispensation, which set the ceiling on pre-shipment and post-shipment rupee export credit at BPLR minus 2.5%, was valid only until April 30, 2007. RBI has now extended this validity for another six months, up to October 31, 2007, without any change in the rate or tenor conditions.
What it means for you
Banks must continue to offer export credit at rates not exceeding BPLR minus 2.5% for the specified tenors, ensuring cost predictability for exporters. This extension maintains the current pricing framework, so no repricing or system changes are needed immediately. However, banks should monitor BPLR movements to ensure compliance with the ceiling.
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 internal systems and loan documentation to reflect the extended validity period up to October 31, 2007.
Communicate the extension to export credit teams and ensure all new sanctions from May 1, 2007 adhere to the BPLR minus 2.5% ceiling.
Review existing export credit portfolios to confirm that no loans are priced above the ceiling for the applicable tenors.
Prepare for a possible review or change after October 31, 2007, as the extension is time-bound.
Who it affects
All scheduled commercial banks offering rupee export credit, Exporters availing pre-shipment or post-shipment credit in rupees, Treasury and credit risk teams managing BPLR-linked pricing
❓ Common questions
Regulatory timeline
Decoded by BankPulse2026-06-19 17:28 IST
Status change: withdrawn10 Jul 2026, 04:05 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
What is the exact interest rate ceiling for rupee export credit under this circular?
The ceiling is BPLR minus 2.5 percentage points for pre-shipment credit up to 180 days and post-shipment credit up to 90 days (including demand bills for transit period). Banks can charge any rate below this ceiling.
Does this extension apply to export credit beyond the specified tenors?
No. For tenors beyond 180 days (pre-shipment) or 90 days (post-shipment), interest rates are free from any ceiling, as per the note in the circular.
When does the new validity period start and end?
The extended dispensation is effective from May 1, 2007, and remains valid until October 31, 2007.
📜 Read the original circular — full text as issued by RBI
RBI/2006-2007/319
Ref.
No. MPD.BC. 291/07.01.279/2006-07
April
12, 2007
Chaitra 22, 1929 (Saka)
To
All
Scheduled Commercial Banks
Dear
Sir/Madam,
Interest
Rate Ceiling on Rupee Export Credit
At
present, the ceiling on interest rates on pre-shipment rupee export credit up
to 180 days and post-shipment rupee export credit up to 90 days is stipulated
at BPLR minus 2.5 per cent. This dispensation is valid up to April 30, 2007.
2.
It has been decided to extend the validity of the above dispensation up to October
31, 2007 ( Annex ).
3.
Kindly acknowledge receipt.
Yours faithfully,
(M.
D. Patra)
Adviser-in-Charge
Annex
Category
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2006-2007/319 · issued 12 Apr 2007. The plain-English explanation above is BankPulse’s own independent summary.
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
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=3412&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.
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