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RBI Deregulates Interest Rates on Export Credit in Foreign Currency

No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2011-12/534 · issued 04 May 2012 · ~2 min read
Quick answerFrom May 5, 2012, banks can set their own interest rates on export credit in foreign currency, replacing earlier regulated rates. This aims to boost fund availability for exporters by giving lenders pricing flexibility.

What changed

Previously, interest rates on export credit in foreign currency were regulated by RBI. With effect from May 5, 2012, banks are now free to determine these rates themselves, as per the directive issued under Sections 21 and 35A of the Banking Regulation Act, 1949.

What it means for you

Banks gain full pricing freedom on foreign currency export loans, allowing them to compete more effectively and tailor rates to market conditions. This deregulation is expected to increase the flow of credit to exporters, as banks can offer more attractive terms. Lenders must now develop internal pricing models and risk assessment frameworks for these loans.

Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.

What banks were required to do at the time

Who it affects

All scheduled commercial banks (excluding RRBs) offering export credit in foreign currency, Exporters availing foreign currency export credit, Bank treasury and credit departments

❓ Common questions

Regulatory timeline

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

From when does this deregulation take effect?

The deregulation is effective from May 5, 2012, as per the RBI directive dated May 4, 2012.

Does this apply to all types of export credit?

This circular specifically applies to export credit denominated in foreign currency. Domestic currency export credit may be governed by separate regulations.

What legal authority does RBI use for this change?

RBI issued this directive under Sections 21 and 35A of the Banking Regulation Act, 1949, which empower it to regulate interest rates and ensure public interest.

📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed by RBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #1348: DBOD.DIR.BC.No.99/04.02.001/2011-12 — "Notification on Deregulation of Interest Rates on Export Credit in Foreign Currency" dated May 4, 2012”
📜 Read the original circular — full text as issued by RBI
RBI/2011-12/534 DBOD.DIR.No.100/04.02.001/2011-12 May 4, 2012 All Scheduled Commercial Banks (Excluding RRBs) Dear Sir / Madam, Deregulation of Interest Rates on Export Credit in Foreign Currency Please refer to our circulars DBOD. DIR. No. 52/04.02.001/2011-12 dated November 15, 2011 and DBOD. DIR. No. 91/04.02.001/2011-12 dated March 30, 2012 relating to interest rates on export credit in foreign currency. 2. With a view to increasing the availability of funds to exporters, it has been decided to allow banks to determine their interest rates on export credit in foreign currency with effect from May 5, 2012. 3. A directive DBOD.DIR.No.99/04.02.001/2011-12 dated May 4, 2012, issued in this regard is enclosed . Yours faithfully (Rajesh Verma) Chief General Manager DBOD.DIR.BC.No.99 /04.02.001/2011-12 May 4, 2012 Deregulation of Interest Rates on Export Credit in Foreign Currency In exercise of the powers conferred by Sections 21 and 35A of the Banking Regulation Act, 1949, the Reserve Bank of India being satisfied that it is necessary and expedient in the public interest so to do, hereby directs that it has been decided to allow banks to determine their interest rates on export credit in foreign currency with effect from May 5, 2012. (B. Mahapatra) Executive Director Related Press Release/Notification
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2011-12/534 · issued 04 May 2012. The plain-English explanation above is BankPulse’s own independent summary.
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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=7178&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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