A recent press report said that the Government has announced an extension of 2 per cent interest subsidy on rupee export credit for a year effective from April 1, 2011.
The Reserve Bank of India, in its recent announcement said that the banks should reduce the interest rate to be charged on the exporters to a minimum of 7 per cent to the exporters eligible for subsidy. It also said that the benefit of 2 per cent interest subsidy should be passed by the banks to all the eligible exporters.
Under this interest subsidy scheme four sectors are being covered. The four sectors include handlooms, handicrafts, carpet and small and medium enterprises.
The scheme of interest subsidy on pre- and post- shipment rupee export credit had already been in effect from April 2, 2010 to March 31, 2011. It is seen that the banks were offering rupee export credit at or above base rate. The loans that were sanctioned between April and September, 2011 will be provided with interest subsidy.