What changed
The Government of India extended the Interest Equalization Scheme from September 1 to September 30, 2024, but only for MSME manufacturer exporters. The annual net subvention amount is capped at ₹10 crore per Importer-Exporter Code for a given financial year, with a ₹5 crore cap for MSME manufacturers till September 30, 2024, for the financial year starting from April 1, 2024. For non-MSME manufacturer and merchant exporters, the cap is ₹2.5 crore per IEC till June 30, 2024.
What it means for you
Banks must now apply the scheme only to MSME manufacturer exporters for the extended period, with stricter subvention caps per IEC. The ₹5 crore cap for MSMEs and ₹2.5 crore cap for non-MSMEs require careful monitoring to avoid exceeding limits. Other scheme terms remain unchanged, so existing processes continue but with updated eligibility and caps.
What you must do
- Update internal systems to restrict IES benefits to MSME manufacturer exporters only for the period Sept 1-30, 2024.
- Implement checks to ensure subvention per IEC does not exceed ₹5 crore for MSMEs and ₹2.5 crore for non-MSMEs (till June 30, 2024).
- Communicate the revised caps and eligibility to all export credit processing teams and branches.
- Review past disbursements since April 1, 2024, to ensure cumulative subvention per IEC stays within the new limits.
Who it affects
Scheduled Commercial Banks (excluding RRBs), Primary (Urban) Cooperative Banks, State Cooperative Banks with AD Category-I license, Exim Bank, MSME manufacturer exporters, Non-MSME manufacturer and merchant exporters
Is the IES extension applicable to all exporters?
No, the extension from September 1 to 30, 2024, is only for MSME manufacturer exporters. Non-MSME exporters are not covered under this extension.
What are the new subvention caps per IEC?
The annual cap is ₹10 crore per IEC. For MSME manufacturer exporters, a ₹5 crore cap applies till September 30, 2024. For non-MSME manufacturer and merchant exporters, the cap is ₹2.5 crore per IEC till June 30, 2024.
Do other terms of the IES remain the same?
Yes, all other provisions of the scheme as per earlier RBI instructions remain unchanged. Only the extension period and caps have been modified.