Current · Source: Reserve Bank of India · RBI/2013-14/621 · issued FY 2013-14 · ~1 min read
Quick answerRBI reduced the export credit refinance (ECR) limit from 50% to 32% of eligible outstanding rupee export credit, effective immediately. This tightens liquidity support for banks against export lending.
The rule, in the simplest words
RBI now lets banks get only 32% (instead of 50%) of the money they have lent for exports as a loan from RBI, calculated on the export loans that were outstanding at the end of the second previous two‑week period.
Because banks get less money back from RBI, they may have to charge exporters a higher price for export loans.
All scheduled banks (but not Regional Rural Banks) must change their computer systems and reporting forms right away to show the new 32% limit.
Treasury and export‑credit teams need to redo their liquidity plans and decide new pricing for export loans because of the lower refinance amount.
How it plays out — a real example
Rajesh Patel, an export‑credit officer at a Mumbai scheduled bank, checks his daily report and sees that the bank can now claim only 32% of its export loan book from RBI. He updates the bank's reporting template, informs the treasury team to adjust the liquidity forecast, and revises the interest rate on new export loans to keep the bank profitable, all while reassuring his exporter clients that the bank is still supporting their trade.
What changed
The eligible limit for export credit refinance (ECR) was reduced from 50% to 32% of outstanding rupee export credit eligible for refinance as at the end of the second preceding fortnight. The change was announced in the Second Bi-monthly Monetary Policy Statement 2014-15 and takes effect immediately. The reporting format in Annex III of the Master Circular was also updated to reflect the new 32% limit.
What it means for you
Banks will now get less liquidity from RBI against their export credit portfolio, potentially squeezing their funding for export loans. This could increase the cost of export credit for banks and may lead to tighter lending terms for exporters. The move signals RBI's gradual withdrawal of crisis-era liquidity support as the economy stabilizes.
What you must do
Update internal systems and reporting formats to reflect the new 32% ECR limit immediately.
Reassess liquidity planning and export credit pricing to account for reduced refinance availability.
Communicate the change to treasury and credit teams handling export finance.
Review outstanding export credit portfolios to ensure accurate calculation of eligible refinance limits.
Who it affects
All scheduled banks (excluding Regional Rural Banks), Treasury departments managing liquidity and refinance, Export credit lending teams, Exporters relying on bank credit
❓ Common questions
What is the new export credit refinance limit?
The limit has been reduced from 50% to 32% of the outstanding rupee export credit eligible for refinance as at the end of the second preceding fortnight.
When does this change take effect?
It takes effect immediately from June 3, 2014, as announced in the Second Bi-monthly Monetary Policy Statement 2014-15.
Which banks are excluded from this circular?
Regional Rural Banks (RRBs) are excluded from this change.
📜 Read the original circular — full text as issued by RBI
RBI/2013-14/621
Jyeshtha 13, 1936 (Saka)
REF.No.MPD.BC.372/07.01.279/2013-14
June 3, 2014
To
All Scheduled Banks [excluding Regional Rural Banks(RRBs)]
Dear Sir/Madam,
Export Credit Refinance Facilities
Please refer to our circular No.MPD.355/07.01.279/2011-12 dated June 18, 2012 whereby the eligible limit of export credit refinance (ECR) facility for schedule banks (excluding RRBs) was enhanced from the level of 15 per cent of the outstanding rupee export credit eligible for refinance as at the end of the second preceding fortnight to 50 per cent.
2. As indicated in the Second Bi-monthly Monetary Policy Statement 2014-15 announced today, it has been decided to reduce the eligible limit of ECR facility from the level of 50 per cent of the outstanding rupee export credit eligible for refinance as at the end of the second preceding fortnight to 32 per cent with immediate effect .
3. Part A of the reporting format appearing in Annex III of the Master Circular No.MPD. 366/07.01.279/2013-14 dated July 1, 2013 is accordingly modified and enclosed .
Yours faithfully,
(Michael Debabrata Patra)
Principal Adviser
Annex III
Reporting Formats
Form DAD 389
Name of the Bank _______________________________________________
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-14/621 · issued FY 2013-14. The plain-English explanation above is BankPulse’s own independent summary.
Update internal systems and reporting formats to reflect the new 32% ECR limit immediately.
Communicate the change to treasury and credit teams handling export finance.
📜 Compliance
Reassess liquidity planning and export credit pricing to account for reduced refinance availability.
Review outstanding export credit portfolios to ensure accurate calculation of eligible refinance limits.
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 banks (excluding Regional Rural Banks), Treasury departments managing liquidity and refinance, Export credit lending teams, Exporters relying on bank credit), your first concrete step on “Export Credit Refinance Limit Cut to 32%” is: “Update internal systems and reporting formats to reflect the new 32% ECR limit immediately.” (RBI issued this FY 2013-14).
Circular: RBI/2013-14/621 -- Export Credit Refinance Limit Cut to 32%
Issued: FY 2013-14
Action required: Update internal systems and reporting formats to reflect the new 32% ECR limit immediately.
Action required: Reassess liquidity planning and export credit pricing to account for reduced refinance availability.
Action required: Communicate the change to treasury and credit teams handling export finance.
Action required: Review outstanding export credit portfolios to ensure accurate calculation of eligible refinance limits.
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=8915&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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