2% interest subvention scheme for 2011-12
Oct. 12, 2011
All Members of the Council
Sub : 2% interest subvention scheme on Rupee Export Credit
The Reserve Bank of India (RBI) has issued a Circular No.RBI/2011/12-215 dated Oct. 11, 2011 informing that the 2% interest subvention scheme on Rupee export credit for certain notified sectors namely handicrafts, handlooms, carpet and Small and Medium Enterprises (SMEs) will be implemented during the period April 1, 2011 to March 31, 2012.
Accordingly, banks have been requested to reduce the interest rate chargeable to exporters as per Base Rate systems for the eligible export sectors for the export credit subvention by the amount of subvention available subject to a floor rate of 7%.
As far as the leather sector is concerned, the Small and Medium Enterprises (SMEs) will be eligible to get the 2% interest subvention on Rupee Export Credit for the period April 1, 2011 to March 31, 2012, which means there will be a reduction of 2% on the interest rates currently applied on rupee export credit. However, the net interest rate applied after subvention should not go below 7%, which is the floor rate.
Members may kindly note the above.
Ali Ahmed Khan
COUNCIL FOR LEATHER EXPORTS