UCBs: Export Credit Interest Subvention Hiked to 3%
No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2013-14/207 · issued 30 Aug 2013 · ~2 min read
Quick answerRBI has increased interest subvention on rupee export credit for UCBs from 2% to 3% for specified sectors, effective August 1, 2013. This applies to scheduled primary urban co-operative banks holding AD Category I licence. All other terms from earlier circulars remain unchanged.
What changed
The Government of India decided to raise the interest subvention rate on pre- and post-shipment rupee export credit for specified sectors from 2% to 3%, effective August 1, 2013. RBI issued a directive on August 26, 2013, implementing this increase for scheduled UCBs holding AD Category I licence. Earlier circulars had extended the 2% subvention up to March 31, 2014.
What it means for you
UCBs can now offer a higher subsidy of 3% on export credit to eligible sectors, reducing the effective interest cost for exporters. This makes export financing more attractive for both banks and their customers. Banks must update their lending rates and systems to reflect the new subvention rate from August 1, 2013.
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
Update internal systems and loan documentation to apply 3% interest subvention on rupee export credit for specified sectors from August 1, 2013.
Communicate the revised subvention rate to all branches handling export credit and ensure compliance with the directive.
Review and maintain records to claim the subvention from the Government of India as per existing terms and conditions.
Ensure that all other terms from circulars dated January 22, 2013 and June 4, 2013 remain unchanged and are followed.
Who it affects
Scheduled Primary (Urban) Co-operative Banks holding AD Category I licence, Exporters in specified sectors availing rupee export credit from UCBs, Treasury and credit departments of UCBs handling export finance
❓ Common questions
Regulatory timeline
Stated effective dateeffective August 1, 2013
Decoded by BankPulse2026-06-18 13:15 IST
Status change: withdrawn03 Aug 2026, 04:00 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
From which date is the increased subvention of 3% applicable?
The increased subvention of 3% is effective from August 1, 2013, as per the Government of India's decision and RBI directive dated August 26, 2013.
Does this circular change any other terms of the export credit scheme?
No, all other terms and conditions from earlier circulars (dated January 22, 2013 and June 4, 2013) remain unchanged. Only the subvention rate has been increased from 2% to 3%.
Which banks are covered by this directive?
This directive applies to Scheduled Primary (Urban) Co-operative Banks that hold an AD Category I licence for foreign exchange business.
📜 Read the original circular — full text as issued by RBI
RBI/2013-14/207
UBD.BPD.(AD) Cir. No.3/13.05.000/2013-14
August 30, 2013
Chief Executive Officer
Scheduled Primary (Urban) Co-operative Banks
(holding AD Category I licence)
Dear Sir/ Madam
Interest Rates on Rupee Export Credit - UCBs
Please refer to our circular UBD.BPD.(AD).Cir. No. 2/13.05.000/2012-13 dated January 22, 2013 on the captioned subject, extending the interest subvention of 2% up to March 31, 2014 on pre and post shipment rupee export credit to specified export sectors.
2. The Government of India has decided to increase the rate of interest subvention on the exisiting sectors from 2% to 3% with effect from August 1, 2013
3. A directive No. UBD.BPD.Dir.(Exp) No.2/13.05.000/2013-14 dated August 26, 2013 issued in this regard is enclosed.
4. All other terms and conditions mentioned in our circulars UBD.BPD.(AD).Cir. No.2/13.05.000/2012-13 dated January 22, 2013 and UBD.BPD.(AD).Cir. No. 4/ 13.05.000/ 2012-13 dated June 4, 2013 remain unchanged.
Yours faithfully
(A.K. Bera)
Principal Chief General Manager
Encl: as above
UBD.BPD.Dir. (Exp). No. 2/13.05.000/2013-14
August 26, 2013
Interest Rates on Rupee Export Credit - UCBs
In exercise of powers conferred by Section 21 and 35 A of the Banking Regulation Act, 1949 read with Section 56, and in partial modification of its Directive UBD.BPD. Dir. (Exp). No.9/13.05.000/ 2012-13 dated January 21, 2013 , the Reserve Bank of India, being satisfied that it is necessary and expedient in the public interest so to do, hereby directs that, the rate of interest subvention on the existing sectors under the Interest Subvention Scheme on Rupee Export Credit is increased from 2 % to 3 % with effect from August 1, 2013.
(S. Karuppasamy)
Executive Director
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-14/207 · issued 30 Aug 2013. 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=8353&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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