What changed
The Government of India extended the Interest Equalisation Scheme for pre and post shipment rupee export credit by three months to December 31, 2024. A new aggregate cap of ₹50 lakh per MSME for FY2024-25 till December 31, 2024 was introduced. MSME manufacturer exporters who already received ₹50 lakh or more in benefits up to September 30, 2024 cannot claim any further benefit during the extended period.
What it means for you
Banks must immediately update their systems to track cumulative interest equalisation benefits per MSME borrower against the ₹50 lakh cap for FY2024-25. Lenders need to stop disbursing benefits to MSMEs that have already hit the ₹50 lakh threshold as of September 30, 2024. This extension provides continued support for export credit but with tighter fiscal discipline, requiring banks to monitor and report compliance accurately.
What you must do
- Update internal systems to cap aggregate interest equalisation benefits per MSME at ₹50 lakh for FY2024-25 till December 31, 2024.
- Identify MSME manufacturer exporters who have already availed ₹50 lakh or more in benefits up to September 30, 2024 and flag them as ineligible for further claims.
- Ensure all other terms and conditions from the September 20, 2024 circular remain unchanged and are communicated to relevant branches.
- Train frontline staff and credit officers on the new cap and eligibility rules to avoid incorrect disbursements.
Who it affects
All Scheduled Commercial Banks (excluding RRBs), Primary (Urban) Cooperative Banks, State Cooperative Banks with AD Category-I license, Exim Bank, MSME manufacturer exporters availing rupee export credit
What is the new aggregate cap for MSMEs under the extended scheme?
The aggregate fiscal benefit per MSME is restricted to ₹50 lakh for the Financial Year 2024-25 till December 31, 2024.
Are MSMEs that already received ₹50 lakh in benefits by September 30, 2024 eligible for further benefits?
No, such MSMEs are not eligible for any further benefit during the extended period from October 1 to December 31, 2024.
Does this circular change any other terms of the Interest Equalisation Scheme?
No, all other terms and conditions from the extant instructions remain unchanged.