The Reserve Bank of India (RBI) has extended the interest rate ceiling of benchmark prime lending rate minus 2.5 per cent on pre-shipment rupee export credit by up to 270 days and post-shipment rupee export credit by up to 180 days, ie, up to 31 October.
''The ceiling on interest rates on pre-shipment rupee export credit up to 270 days and post-shipment rupee export credit up to 180 days has been stipulated at BPLR minus 2.5 per cent, valid up to 30 April 2009,'' RBI said in a release.
''It has been decided to extend the validity of the above dispensation up to 31 October 2009,'' the RBI release said. The earlier validity was up to 30 April.
The interest subsidy is payable on post-shipment rupee export credit at a rate not exceeding BPLR minus 2.5 percentage points on usance bills of up to 180 days.
Since these are ceiling rates, RBI said, banks would be free to charge any rate below the ceiling rates. Interest rates for the above-mentioned categories beyond the tenors as prescribed above are free.
The Reserve Bank of India had in March extended the interest subsidy for exporters for another six months – till September – in order to give relief to exporters hit by the global financial crisis.
RBI had then extended the interest subvention of 2 per cent on export credit for a further period of six months, i.e, from 1 April 2009 till 30 September 2009 (to labour- intensive sectors like textiles (including handloom), handicrafts, carpets, leather, gems and jewellery, marine products, and small and medium enterprises."
Finance minister Pranab Mukherjee in the interim budget had announced the extension of the scheme for providing concessional credit to exporters till 30 September.
The interest subsidy scheme was to end on 31 March.
India's exports growth entered negative zone after it dipped 12.1 per cent in October.