Home › Circulars › RBI/2008-09/284

Export Credit Refinance Limit Raised to 50%

Current · Source: Reserve Bank of India · RBI/2008-09/284 · issued 15 Nov 2008 · ~2 min read
Quick answerRBI has increased the export credit refinance (ECR) limit from 15% to 50% of eligible outstanding rupee export credit, effective November 15, 2008. The interest rate remains at the repo rate (then 7.5%). This eases liquidity for banks funding exports.
The rule, in the simplest words
How it plays out — a real example

Rahul, a forex & trade-finance officer in Indore, is now able to refinance up to 50% of his eligible export credit, making it easier for him to provide loans to exporters in the region. This increased liquidity will help Rahul's bank to reduce funding costs and encourage more credit to be extended to exporters, ultimately boosting the local economy.

What changed

The eligible limit for export credit refinance (ECR) was raised from 15% to 50% of outstanding rupee export credit eligible for refinance as at the end of the second preceding fortnight. The interest rate on ECR continues to be the prevailing repo rate under LAF, which was 7.5% at the time. The reporting format in Annex III of the Master Circular was updated accordingly.

What it means for you

Banks can now access significantly more liquidity from RBI against their export credit portfolio, doubling their refinance capacity. This reduces funding costs for export lending and encourages banks to extend more credit to exporters. The unchanged repo rate ensures no additional interest burden on the increased facility.

What you must do

Who it affects

All scheduled banks (excluding RRBs) that offer export credit, Treasury and forex departments managing liquidity, Export finance teams and credit officers

❓ Common questions

Regulatory timeline

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

What is the new ECR limit percentage?

The eligible limit has been increased from 15% to 50% of outstanding rupee export credit eligible for refinance as at the end of the second preceding fortnight.

What interest rate applies to the ECR facility?

The interest rate remains the prevailing repo rate under the Liquidity Adjustment Facility (LAF), which was 7.5% at the time of this circular.

Which export credits are excluded from the eligible limit calculation?

Exclusions include export bills rediscounted with other banks/Exim Bank/Financial Institutions, credit refinanced from NABARD/Exim Bank, PCFC, bills rediscounted abroad, overdue rupee export credit, and other ineligible export credit.

📜 Read the original circular — full text as issued by RBI
RBI/2008-09/284 Ref. MPD. No. 310 /07.01.279/2008-09 November 15, 2008 Kartika 24, 1930 (S) To All Scheduled Banks [excluding Regional Rural Banks (RRBs)] Dear Sir/Madam, Export Credit Refinance Facility: Relaxation Please refer to paragraph No. 4(vii) of the Reserve Bank’s Press Release dated November 15, 2008 on the above-mentioned subject. As indicated therein, the eligible limit of export credit refinance (ECR) facility has been enhanced from the existing level of 15 per cent of the outstanding rupee export credit eligible for refinance as at the end of the second preceding fortnight to 50 per cent. The rate of interest charged on the ECR facility will continue to be the prevailing repo rate under the liquidity adjustment facility (LAF) of the Reserve Bank which is currently 7.5 per cent. 3. Part A of the reporting format appearing in Annex III of the Master Circular Ref.No. MPD.302/07.01.279/2008-09 dated July 1, 2008 is accordingly modified and enclosed. Yours faithfully (M.D. Patra) Adviser-in-Charge Annex III Reporting Formats Form DAD 389 Name of the Bank _______________________________________________
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2008-09/284 · issued 15 Nov 2008. The plain-English explanation above is BankPulse’s own independent summary.
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Who does what — compliance checklist
💻 IT / Systems
  • Update internal systems to calculate ECR limit at 50% of eligible outstanding export credit as per the new formula.
📜 Compliance
  • Use the revised reporting format (Part A of Annex III) for fortnightly ECR limit statements.
  • Ensure export credit data excludes ineligible items like PCFC, bills rediscounted with other banks, and overdue credit.
  • Monitor the repo rate for any changes, as it directly impacts ECR interest costs.
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 banks (excluding RRBs) that offer export credit, Treasury and forex departments managing liquidity, Export finance teams and credit officers), your first concrete step on “Export Credit Refinance Limit Raised to 50%” is: “Update internal systems to calculate ECR limit at 50% of eligible outstanding export credit as per the new formula.” (RBI issued this 15 Nov 2008).

  1. Circular: RBI/2008-09/284 -- Export Credit Refinance Limit Raised to 50%
  2. Issued: 15 Nov 2008
  3. Action required: Update internal systems to calculate ECR limit at 50% of eligible outstanding export credit as per the new formula.
  4. Action required: Use the revised reporting format (Part A of Annex III) for fortnightly ECR limit statements.
  5. Action required: Ensure export credit data excludes ineligible items like PCFC, bills rediscounted with other banks, and overdue credit.
  6. Action required: Monitor the repo rate for any changes, as it directly impacts ECR interest costs.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. 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.

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Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=4645&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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