RBI Extends Export Credit Interest Rate Ceilings to April 2008
Current · Source: Reserve Bank of India · RBI/2007-08/166 · issued 25 Oct 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 until April 30, 2008. A lower ceiling of BPLR minus 4.5% continues for specific exporter categories for FY 2007-08.
The rule, in the simplest words
Banks must keep the interest rate on export loans (money given to exporters) at or below 'BPLR minus 2.5%' (the bank's main lending rate minus 2.5 percentage points) for loans given before shipping (pre-shipment) up to 180 days and after shipping (post-shipment) up to 90 days, until April 30, 2008.
For some special exporter groups, banks must use an even lower ceiling of 'BPLR minus 4.5%' (the bank's main lending rate minus 4.5 percentage points) for the same loan types, from April 1, 2007 to March 31, 2008.
This rule extends an earlier deadline from October 31, 2007 to April 30, 2008, so banks must update their loan systems and paperwork to show the new end date.
Banks need to check which exporters qualify for the lower rate (BPLR minus 4.5%) using two special RBI circulars from July and October 2007, and apply that rate correctly.
How it plays out — a real example
A forex & trade-finance officer in Indore, Priya, is processing a pre-shipment loan for a textile exporter. She checks the new circular and sets the interest rate at BPLR minus 2.5% (the bank's main lending rate minus 2.5 percentage points) for the 180-day loan, valid until April 30, 2008. For a small exporter who qualifies under the special category, she applies the lower BPLR minus 4.5% rate, ensuring her loan system reflects the correct ceiling and the extended deadline.
What changed
The earlier circular had set the interest rate ceiling on pre-shipment and post-shipment rupee export credit at BPLR minus 2.5%, valid only until October 31, 2007. This circular extends that same ceiling arrangement until April 30, 2008. Additionally, it confirms that a separate, more concessional ceiling of BPLR minus 4.5% remains applicable for certain exporter categories for the period April 1, 2007 to March 31, 2008.
What it means for you
Banks must continue to cap interest rates on short-term rupee export credit at BPLR minus 2.5% for another six months, ensuring exporters get predictable funding costs. The separate BPLR minus 4.5% ceiling for specific categories means banks need to maintain two-tier pricing for export loans. This extension provides stability but also limits banks' ability to reprice export credit upward in a rising rate environment.
What you must do
Update your loan pricing systems to apply BPLR minus 2.5% ceiling on pre-shipment credit up to 180 days and post-shipment credit up to 90 days until April 30, 2008.
Identify and apply the lower BPLR minus 4.5% ceiling for eligible exporter categories as per the referenced DBOD circulars for FY 2007-08.
Ensure all export credit sanction letters and rate sheets reflect the extended validity period.
Communicate the extension to your treasury and credit teams to avoid any pricing errors.
Who it affects
All scheduled commercial banks offering rupee export credit, Exporters availing pre-shipment or post-shipment credit in rupees, Bank treasury and credit policy teams
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 standard rupee export credit under this circular?
For pre-shipment credit up to 180 days and post-shipment credit up to 90 days, the ceiling is BPLR minus 2.5 percentage points. This applies from November 1, 2007 to April 30, 2008.
Does this circular change the concessional rate for certain exporters?
No, it only extends the general ceiling. The separate concessional ceiling of BPLR minus 4.5% for specific exporter categories (as per earlier DBOD circulars) remains unchanged for the period April 1, 2007 to March 31, 2008.
Can banks charge interest rates below the ceiling?
Yes, the circular explicitly states that since these are ceiling rates, banks are free to charge any rate below the stipulated ceiling.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
RBI’s words: “extend the validity of the above dispensation up to October 31, 2008”
📜 Read the original circular — full text as issued by RBI
RBI/2007-08/166
Ref.No.MPD.BC.295
/07.01.279 / 2007-08
October
25, 2007
Kartika
3, 1929 (S)
To,
All
Scheduled Commercial Banks
Dear
Sir/Madam,
Interest
Rate Ceiling on Rupee Export Credit
Please
refer to our circular No. MPD.BC.291/07.01.279/
dated April 12, 2007 in terms of which 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 has been stipulated at BPLR minus 2.5 per cent, valid up to October 31,
2007.
2.
It has been decided to extend the validity of the above dispensation up to April
30, 2008 ( Annex ).
3.
Moreover, banks would continue to charge interest rates not exceeding BPLR minus
4.5 percentage points on pre-shipment credit up to 180 days and post shipment
credit up to 90 days on the outstanding amount for the period April 1, 2007 to
March 31, 2008 to the categories of exporters as mentioned in circulars DBOD.Dir.(Exp).BC.No.22
/ 04.02.01 / 2007-08 and DBOD.Dir.(Exp).BC.No.34B
/ 04.02.01 / 2007-08 issued by the Reserve Bank on July 13, 2007 and October
6, 2007 respectively.
4. Kindly acknowledge receipt.
Yours
faithfully,
(M.D.Patra)
Adviser-in-Charge
Annex
Category
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2007-08/166 · issued 25 Oct 2007. The plain-English explanation above is BankPulse’s own independent summary.
Update your loan pricing systems to apply BPLR minus 2.5% ceiling on pre-shipment credit up to 180 days and post-shipment credit up to 90 days until April 30, 2008.
Communicate the extension to your treasury and credit teams to avoid any pricing errors.
📜 Compliance
Identify and apply the lower BPLR minus 4.5% ceiling for eligible exporter categories as per the referenced DBOD circulars for FY 2007-08.
Ensure all export credit sanction letters and rate sheets reflect the extended validity period.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are an IT/Systems lead at a bank this circular applies to (All scheduled commercial banks offering rupee export credit, Exporters availing pre-shipment or post-shipment credit in rupees, Bank treasury and credit policy teams), your first concrete step on “RBI Extends Export Credit Interest Rate Ceilings to April 2008” is: “Update your loan pricing systems to apply BPLR minus 2.5% ceiling on pre-shipment credit up to 180 days and post-shipment credit up to 90 days until April 30, 2008.” (RBI issued this 25 Oct 2007).
Circular: RBI/2007-08/166 -- RBI Extends Export Credit Interest Rate Ceilings to April 2008
Issued: 25 Oct 2007
Action required: Update your loan pricing systems to apply BPLR minus 2.5% ceiling on pre-shipment credit up to 180 days and post-shipment credit up to 90 days until April 30, 2008.
Action required: Identify and apply the lower BPLR minus 4.5% ceiling for eligible exporter categories as per the referenced DBOD circulars for FY 2007-08.
Action required: Ensure all export credit sanction letters and rate sheets reflect the extended validity period.
Action required: Communicate the extension to your treasury and credit teams to avoid any pricing errors.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
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=3897&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.
Help us keep this accurate
Found an inaccuracy or have an improvement? Tell us. Every report is reviewed by our team before any change is made — nothing goes live unverified.
Public beta — plain-English informational summaries. Always verify against the official RBI source (circular number cited on every page) before making compliance, credit, treasury, audit, or operational decisions. · Join our WhatsApp channel ↗
BANKPULSE · FREE DAILY BRIEF
Get RBI updates for your role
Every important RBI update, decoded in plain English — for your career, exams & financial awareness.
We collect only your email, name and role, used solely to send your brief — never sold or shared. Withdraw anytime via the unsubscribe link in any email. Independent platform, not affiliated with the RBI. Information, not legal advice.
REPORT AN ERROR · BETA
Spotted an error? Earn 500 BankPulse Credits
Help us stay accurate. If your correction is verified true and approved by our founder, you earn 500 BankPulse Credits — redeemable when the platform monetises.
Reviewed by a human before any credit is awarded. We never change the site from crowd input without verification.
WANT A NEW FEATURE · BETA
What would make BankPulse more useful for you?
Tell us what to build next — a tool, a data view, a role page, anything. We read every suggestion.
Thank you — your ideas directly shape what we build.