In a circular to all scheduled banks, the RBI said the banks should pass on the benefit of this two or four per cent interest subvention completely to the eligible exporters. The clarification was issued in wake of queries on the issue from banks and exporters' organisations on the eligibility of subvention either of two per cent or four per cent, in the context of variable Benchmark Prime Lending Rates (BPLR) leading to variable interest rates charged to the exporters by individual banks.
RBI said the banks may verify the subvention claims submitted by them with it and if need be, recast them and confirm that the claims made are in conformity with the guidelines and the clarifications provided hereto. In case there is no change in the claims submitted earlier, banks may confirm the position to RBI.
With reference to the RBI circular dated October 6, 2007, it is clarified that the Rupee Export Credit Interest Subvention shall become applicable to the additional sectors as defined in the circular, from the date of issue.
RBI also clarified that banks are eligible to claim subvention so long as the rate of interest on rupee credit for exports after subvention does not fall below 7 seven per cent, this floor rate is also applicable for the specified sectors mentioned in the RBI Circulars issued on July 13 and October 6 in 2007.