What changed
The Government of India expanded the interest subvention scheme to include 134 tariff lines of engineering products for the period January 1, 2013 to March 31, 2013. Additionally, the 2% subvention on rupee export credit for nine specified sectors (including handicrafts, carpets, handlooms, SMEs, readymade garments, processed agriculture products, sports goods, toys, and the engineering products) is extended from April 1, 2013 to March 31, 2014.
What it means for you
Scheduled Primary Urban Co-operative Banks holding AD Category I licence can now offer concessional export credit to engineering sector exporters on the same terms as other eligible sectors. Banks must ensure correct identification of eligible tariff lines and submit quarterly claims with auditor certificates to RBI for reimbursement.
What you must do
- Update internal systems to include the 134 engineering tariff lines (Annex I) for interest subvention claims from January 1, 2013.
- Submit quarterly claims for subvention reimbursement to RBI's Urban Banks Department starting from quarter ending June 30, 2013, using the format in Annex III.
- Ensure each claim is accompanied by an External Auditor's Certificate certifying the amount and period.
- Calculate subvention on outstanding rupee export credit from disbursement date to repayment or overdue date, whichever is earlier.
Who it affects
Scheduled Primary Urban Co-operative Banks with AD Category I licence, Exporters in engineering sector (134 tariff lines), Exporters in handicraft, carpets, handlooms, SMEs, readymade garments, processed agriculture products, sports goods, and toys
Which sectors are covered under the extended interest subvention from April 1, 2013 to March 31, 2014?
The 2% subvention applies to handicraft, carpets, handlooms, SMEs (as defined in Annex II), readymade garments, processed agriculture products, sports goods, toys, and the 134 engineering tariff lines listed in Annex I.
How should banks claim reimbursement for the subvention?
Claims must be submitted quarterly to the Chief General Manager-in-Charge, Urban Banks Department, RBI, Central Office, Mumbai, using the format in Annex III, accompanied by an External Auditor's Certificate.
What is the period for which the engineering sector is eligible under this circular?
The engineering sector (134 tariff lines) is eligible for interest subvention from January 1, 2013 to March 31, 2013, and then again from April 1, 2013 to March 31, 2014 as part of the extended scheme.