On Tuesday, the Reserve Bank of India (RBI) extended the interest subsidy scheme for the MSME (Micro, Small and Medium Enterprise) exporters till March 2024 for boosting outbound shipments. The interest subsidy scheme under which the exporters get subsidy is the ‘Interest Equalisation Scheme for Pre and Post Shipment Rupee Export Credit’.
Interest Subsidy Scheme Extension
In April 2021, the RBI first extended the scheme until June and later till September 2021. It revised the interest equalisation rates under the scheme to 2% and 3% for specified categories of MSME manufacturer exporters.
The government approved extending the ‘Interest Equalisation Scheme for Pre and Post Shipment Rupee Export Credit’ until 31 March 31 2024, or until further review, whichever is earlier. The extension is effective from 1 October 2021 and ends on 31 March 2024.
Interest Subsidy Scheme Details
The scheme will not apply to entities and telecon instruments availing benefits under the government’s Production Linked Incentive (PLI) scheme. The RBI stated that from 1 April 2022, banks should reduce the interest rate charged to the eligible exporters according to the guidelines and submit the claims in original within 15 days in the prescribed format from the end of the respective month.
The RBI also stated that while issuing approval to the exporter, the banks must furnish the interest subvention provided, prevailing interest rates and the net rate charged to each exporter to ensure accountability and transparency in the scheme’s operation.
The RBI further stated that banks should identify the eligible exporters under the scheme from 1 October 2021 to 31 March 2022, credit their accounts with the qualified amount of interest equalisation and submit a sector-wise consolidated reimbursement claim for the respective period to the RBI by 30 April 2022.
India’s merchandise export in February 2022 was USD 33.81 billion, with an increase of 22.36% over USD 27.63 billion in the same month of 2021.
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