RBI extends 2 pc interest subsidy scheme for exporters

MUMBAI: The Reserve Bank today extended the 2 per cent interest subsidy scheme by another year on rupee export credit to the labour-oriented and small scale sectors to cushion them from slowdown in markets like the US and Europe.

Exporters of handicrafts, handlooms, readymade garments, processed agriculture products and carpets will be eligible for interest subvention to be available up to March 31, 2013, the Reserve Bank of India ( RBI) said.

Besides, sports goods and toys exporters would also be eligible for such benefit.

Last year, the government had given interest subvention facility to exporters which expired in March 2012.

In this regard, it said, the government has decided to extend interest subvention of 2 per cent on rupee export credit with effect from April 1, 2012 to March 31, 2013.

The exporters in the small and medium enterprises across all the sectors would also be entitled for cheaper bank credit, subject to a minimum interest rate of 7 per cent.

In a direction to the banks, the RBI said the government has decided to extend the scheme from April 2012 to March 2013, for the seven specified category of exporters.

"Accordingly, banks may reduce the interest rate chargeable to the exporters as per base rate system in the above mentioned sectors eligible for export credit subvention by the amount of subvention available subject to a floor rate of 7 per cent," it said.

"Banks may ensure to pass on the benefit of 2 per cent interest subvention completely to the eligible exporters," it added.