Master Circular on Export Credit Refinance Facility

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MPD. No. 302/07.01.279/2008-09 July 1, 2008 Ashadha 10, 1930 (S) The Chairmen/Chief Executives of all Scheduled Banks (excluding RRBs) Dear Sir, Master Circular on Export Credit Refinance Facility We enclose the Master Circular on Export Credit Refinance Facility which consolidates and updates all instructions/guidelines issued on the subject up to June 30, 2008. This Master Circular has also been placed on the RBI's website ( www.rbi.org.in ). Instructions/Guidelines issued on the subject during the period from July 2, 2007 to June 30, 2008 are placed separately in the Appendix. Yours faithfully (M.D. Patra)  Adviser-in-Charge Master Circular on Export Credit Refinance Facility Contents 1. Introduction 2. Participants 3. Limit 4. Interest Rate 5. Margin Requirement 6. Duration 7. Collateral 8. Minimum Amount of Availment 9. Place of Availment 10. Repayment 11. Penalties 12. Documentation 13. Reporting Requirement 14. Condition 15. Annexes Reporting Formats 16. Appendix: List of Circulars Master Circular on Export Credit Refinance (ECR) Facility 1. Introduction 1.1 The Reserve Bank of India (RBI) provides export credit refinance facility to banks under Section 17(3A) of the Reserve Bank of India Act 1934. This facility is given on the basis of banks' eligible outstanding rupee export credit both at the pre-shipment and post-shipment stages. The quantum of refinance is fixed from time to time based on the stance of monetary and credit policy of the RBI. 2. Participant s 2.1 All scheduled banks (excluding RRBs), which are authorised dealers in foreign exchange and have extended export credit are eligible to avail of the export credit refinance facility. 3. Limit 3.1 At present, the scheduled banks are provided export credit refinance to the extent of 15.0 per cent of the outstanding export credit eligible for refinance as at the end of the second preceding fortnight. The definition of outstanding export credit eligible for refinance is given in Annex I. 4. Interest Rate 4.1 Export credit refinance facility is available at the Repo Rate under the Liquidity Adjustment Facility (LAF) of the Reserve Bank, as announced from time to time. 4.2 Interest shall be payable with monthly rests and the amounts of such interest calculated on daily balances would be debited to the account of such advances at the end of respective month or earlier when the balance outstanding is wiped out. 5. Margin Requirement 5.1 No margin is required to be maintained. 6. Duration 6.1 Repayable on demand or on the expiry of fixed periods not exceeding one hundred and eighty days. 7. Collateral 7.1 RBI extends the export credit refinance against the Demand Promissory Note (DPN) of banks supported by a declaration that they have extended export credit and the outstanding amount eligible for refinance is not less than the loan/advance from the RBI. 8. Minimum Amount of Availment 8.1 The minimum amount of availment under this facility is Rupees one lakh and multiples thereof. 9. Place of Availment 9.1 This facility can be availed of at centres wherever the Reserve Bank has a Banking Department. 10. Repayment 10.1 The refinance has to be repaid on demand or within 180 days. 11. Penalties 11.1 In the event of a scheduled bank having irregular availment of export credit refinance, a penal rate of interest as decided by the Reserve Bank from time to time will be charged on the outstanding loan or loans. 11.2 The instances on which penal rate would be applicable for irregular availment of export credit refinance are set out in Table 1 . Table 1: Illustration of Irregular Availment of Export Credit Refinance a) Utilisation of ECR exceeds the total limit. b) Wrong calculation/ reporting of refinance limit by banks. c) Non-repayment of refinance within 180 days. d) Delay in reporting excess utilisation by banks. 12. Documentation 12.1 The banks have to execute the following documents for availing of export credit refinance facility (Annex II): a)A stamped agreement in Form No. DAD 297. b)A Demand Promissory Note (DPN) in Form No. DAD 295 A. c)Board Resolution in Form No. DAD 298 authorising the borrowing under the scheme and also the officials who will execute loan documents on behalf of the bank. d)For enhancement of limit, a letter in Form No. DAD 299 extending the agreement to enhance limit together with consolidated DPN for the fresh limit. e)In terms of Para 7.30 of Banking Department Manual, Agreements and letters of extension need not be renewed so long as there is no change in the terms thereof. DPN should, however, be renewed every three years of their dates of execution not withstanding their validity for three years from the date of transaction. 12.2 The borrowing bank should submit to the Monetary Policy Department, Reserve Bank of India, a fortnightly declaration in form No. DAD.389 together with a statement of Export Refinance Entitlement in form No.DAD.390 to enable the Reserve Bank of India to monitor the position of the outstanding borrowings under the scheme in relation to its outstanding export credit advances. 13. Reporting Requirement 13.1 The availing banks are required to report their outstanding export credit eligible for refinance within five days from the relevant date in the format provided in Annex III. 14. Condition 14.1 It is essential that the outstanding borrowings at all times are fully covered by the borrowing bank’s holding of export bills/amount of eligible pre-shipment advances as reported in their latest declaration. If at any point of time it is found that the total amount of bills held by banks/amount of eligible pre-shipment advances covered by the declaration falls below the amount borrowed, the bank should forthwith adjust or repay excess refinance from the RBI. 15. Annexes 15.1 Definitions, Forms of Agreement and Reporting Formats pertaining to Export Credit Refinance Facility are listed in Annex I Annex II and Annex III , respectively. 16. Appendix 16.1 All Circulars issued by the Reserve Bank of India related to Export Credit Refinance Facility are listed in the Appendix . 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 © Reserve Bank of India. 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Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2008-09/37 · issued 01 Jul 2008. The plain-English explanation above is BankPulse’s own independent summary.

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