What changed
The Government of India decided to add Readymade Garments to the existing interest subvention scheme for rupee export credit, alongside Textiles, with retrospective effect from December 1, 2008. This extends the 2% subvention benefit to this sector for the period up to March 31, 2010.
What it means for you
Banks must now extend the 2% interest subvention on pre- and post-shipment rupee export credit to exporters of Readymade Garments, covering the same period as Textiles. This will require lenders to adjust their systems to identify eligible exporters and process revised claims for the subvention from the Government.
What you must do
- Update internal systems to include Readymade Garments under the interest subvention scheme for rupee export credit.
- Pass on the 2% subvention benefit to eligible exporters of Readymade Garments for the period from December 1, 2008 to March 31, 2010.
- Submit revised claims to RBI in the prescribed format as per the December 16, 2008 circular.
- Ensure compliance with the directive issued under Sections 21 and 35A of the Banking Regulation Act, 1949.
Who it affects
All Scheduled Commercial Banks (excluding RRBs), Exporters in the Readymade Garments sector, Exporters in the Textiles sector
What is the interest subvention rate under this scheme?
The scheme provides a 2% interest subvention on rupee export credit, as per the earlier circular dated December 16, 2008.
From which date is the inclusion of Readymade Garments effective?
The inclusion is effective from December 1, 2008, and applies until March 31, 2010.
Do banks need to submit any claims to RBI?
Yes, banks must submit revised claims for the subvention in the format specified in the December 16, 2008 circular.