RBI Extends Export Credit Interest Rate Ceiling Till April 2010
Current · Source: Reserve Bank of India · RBI/2009-10/197 · issued 28 Oct 2009 · ~2 min read
Quick answerRBI has extended the interest rate ceiling on rupee export credit (pre-shipment up to 270 days and post-shipment up to 180 days) at BPLR minus 2.5% from November 1, 2009 to April 30, 2010. Banks can charge below this ceiling.
The rule, in the simplest words
Banks must not charge more than BPLR (the bank's best lending rate) minus 2.5% for export loans given before shipping (up to 270 days) and after shipping (up to 180 days).
This rule is extended from November 1, 2009 to April 30, 2010, so banks keep using the same low rate for these loans.
Banks can charge even less than this ceiling if they want, but they cannot go above it.
For export loans that last longer than 270 days before shipping or 180 days after shipping, banks can set any interest rate they choose.
How it plays out — a real example
A forex & trade-finance officer in Mumbai processes a pre-shipment export loan for a jewelry exporter. She checks the new circular and applies the ceiling rate of BPLR minus 2.5% for the 200-day loan, ensuring the exporter gets affordable financing to buy gold. She also notes that if the loan goes beyond 270 days, she can set a higher market rate.
What changed
The earlier circular (April 28, 2009) had set the ceiling on pre-shipment and post-shipment rupee export credit rates at BPLR minus 2.5%, valid until October 31, 2009. This circular extends that same dispensation by six months, now valid up to April 30, 2010.
What it means for you
Banks must continue to offer export credit at rates not exceeding BPLR minus 2.5% for the specified tenors. This keeps export financing affordable for borrowers, but also caps the interest income banks can earn on these loans. Banks have flexibility to charge lower rates if they choose.
What you must do
Update your lending systems to apply the ceiling rate of BPLR minus 2.5% for pre-shipment credit up to 270 days and post-shipment credit up to 180 days from November 1, 2009.
Ensure that for tenors beyond these limits, interest rates are freed from the ceiling and can be set at market rates.
Communicate the extension to your export credit teams and update internal circulars accordingly.
Acknowledge receipt of this RBI circular as instructed.
Who it affects
All scheduled commercial banks offering rupee export credit, Exporters availing pre-shipment or post-shipment credit in rupees
❓ Common questions
What is the new interest rate ceiling for rupee export credit?
The ceiling remains unchanged at BPLR minus 2.5 percentage points for pre-shipment credit up to 270 days and post-shipment credit up to 180 days. This extension is valid from November 1, 2009 to April 30, 2010.
Can banks charge interest rates above the ceiling?
No, the ceiling is a maximum. Banks can charge any rate below the ceiling, but cannot exceed BPLR minus 2.5% for the specified tenors. For tenors beyond these limits, rates are free.
Does this circular affect export credit in foreign currency?
No, this circular specifically addresses rupee export credit. Foreign currency export credit is governed by separate instructions.
📜 Read the original circular — full text as issued by RBI
RBI/2009-10/197
MPD.BC.326 /07.01.279/2009-10
October 28, 2009
Kartika 5, 1931(S)
All Scheduled Commercial Banks
Dear Sir/Madam,
Interest Rate Ceiling on Rupee Export Credit
Please refer to our circular No. MPD.BC.323/07.01.279/2008-09 dated April 28, 2009 in terms of which the ceiling on interest rates on pre-shipment rupee export credit up to 270 days and post-shipment rupee export credit up to 180 days has been stipulated at BPLR minus 2.5 per cent, valid up to October 31, 2009.
2. It has been decided to extend the validity of the above dispensation up to April 30, 2010 ( Annex ).
3. Kindly acknowledge receipt.
Yours faithfully,
(Janak Raj)
Adviser-in-Charge
Encl: as above.
Annex
Category
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2009-10/197 · issued 28 Oct 2009. The plain-English explanation above is BankPulse’s own independent summary.
Update your lending systems to apply the ceiling rate of BPLR minus 2.5% for pre-shipment credit up to 270 days and post-shipment credit up to 180 days from November 1, 2009.
Communicate the extension to your export credit teams and update internal circulars accordingly.
📜 Compliance
Ensure that for tenors beyond these limits, interest rates are freed from the ceiling and can be set at market rates.
Acknowledge receipt of this RBI circular as instructed.
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), your first concrete step on “RBI Extends Export Credit Interest Rate Ceiling Till April 2010” is: “Update your lending systems to apply the ceiling rate of BPLR minus 2.5% for pre-shipment credit up to 270 days and post-shipment credit up to 180 days from November 1, 2009.” (RBI issued this 28 Oct 2009).
Circular: RBI/2009-10/197 -- RBI Extends Export Credit Interest Rate Ceiling Till April 2010
Issued: 28 Oct 2009
Action required: Update your lending systems to apply the ceiling rate of BPLR minus 2.5% for pre-shipment credit up to 270 days and post-shipment credit up to 180 days from November 1, 2009.
Action required: Ensure that for tenors beyond these limits, interest rates are freed from the ceiling and can be set at market rates.
Action required: Communicate the extension to your export credit teams and update internal circulars accordingly.
Action required: Acknowledge receipt of this RBI circular as instructed.
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 03 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=5331&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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