What changed
The ECR limit for scheduled banks (excluding RRBs) was increased from 15% to 50% of outstanding rupee export credit eligible for refinance, effective the fortnight beginning June 30, 2012. This change was aimed at enhancing credit flow to the export sector.
What it means for you
Banks can now access significantly more liquidity from RBI against their export credit portfolios, freeing up funds to lend more to exporters. The additional liquidity support of over ₹300 billion will help banks manage funding costs and support export growth without changing the interest rate, which remains at the repo rate.
What you must do
- Update internal systems to reflect the new 50% ECR limit for eligible export credit.
- Review and adjust export credit portfolios to maximize refinance benefits from the enhanced limit.
- Communicate the revised facility to export lending teams to encourage higher credit disbursement.
- Monitor liquidity impact and align funding strategies with the increased ECR availability.
Who it affects
All scheduled commercial banks (excluding RRBs), Export credit departments and treasury teams, Exporters seeking credit from banks
What is the new ECR limit and when does it take effect?
The ECR limit is raised from 15% to 50% of eligible rupee export credit outstanding, effective from the fortnight beginning June 30, 2012.
Does the interest rate on ECR change?
No, the interest rate remains the prevailing repo rate under LAF, which was 8.0% at the time of the notification.
Which banks are excluded from this relaxation?
Regional Rural Banks (RRBs) are excluded from this enhanced ECR facility.