What changed
The Government of India approved a three-month extension of the Interest Equalization Scheme for pre and post shipment rupee export credit, effective April 1, 2021, through June 30, 2021. The scope and coverage remain unchanged from the previous instructions issued on May 13, 2020.
What it means for you
Banks must continue providing subsidized interest rates on eligible export credit under the scheme for another quarter. This ensures exporters maintain access to cheaper credit, supporting trade recovery. Lenders need to keep their operational processes unchanged until the new deadline.
What you must do
- Continue applying the Interest Equalization Scheme on pre and post shipment rupee export credit as per existing instructions.
- Ensure all eligible export credit disbursed from April 1, 2021, to June 30, 2021, qualifies for the scheme.
- Update internal systems and reporting to reflect the extended validity period.
- Communicate the extension to relevant branches and export credit teams.
Who it affects
All Scheduled Commercial Banks (excluding RRBs), Small Finance Banks, Primary (Urban) Cooperative Banks, EXIM Bank, Exporters availing rupee export credit
Does the extension change the scope or coverage of the scheme?
No, the scope and coverage remain exactly the same as per the May 13, 2020 instructions.
What is the effective period for this extension?
The extension is effective from April 1, 2021, to June 30, 2021, covering three months.
Do we need to issue new operational guidelines?
No, the existing operational instructions issued by RBI continue to remain in force until June 30, 2021.