Good News For Exporters! Banks will now provide Interest Subvention Benefit to Exporters

The RBI has asked Banks to extend the benefit of interest subvention to eligible exporters. The Government of India has launched a new mission to promote exporters in India. Under this scheme, exporters are provided financial assistance from banks and interest subvention from government.

The rate of interest subvention @ 2.75 % per annum will be available on Pre Shipment Rupee Export Credit and Post Shipment Rupee Export Credit for Micro, Small Enterprises, and Medium Enterprises. An MSME exporter may receive a maximum subvention benefit of Rs 50 lakh per financial year.

The Interest Subvention for Pre- and Post- Shipment Export Credit intervention under the EXPORT PROMOTION MISSION – NIRYAT PROTHSAHAN was launched with immediate effect to facilitate improved access to pre- and post-shipment rupee export credit for MSME exporters by reducing the cost of such credit and provide a rules-based and transparent interest-relief mechanism aimed at enhancing liquidity for MSME exporters and enabling them to meet working-capital requirements efficiently.

Click here to download Guidelines

The Indian government has approved a Credit Guarantee Scheme for Exporters (CGSE) to support both small and large exporters during rising global trade challenges. The Union Cabinet, led by Prime Minister Narendra Modi, approved the decision on November 12. Under this scheme, the National Credit Guarantee Trustee Company Limited (NCGTC) will provide a 100% credit guarantee.

The scheme will be carried out through the Department of Financial Services (DFS). NCGTC will give guarantees to banks and NBFCs so they can lend more easily to eligible exporters. A management committee, headed by the DFS Secretary, will check and review the progress of the scheme.

Key Features of the Credit Guarantee Scheme (CGSE): Collateral Free Loan Scheme for Exporters

• Implementing Agency: National Credit Guarantee Trustee Company (NCGTC)
• Eligible Borrowers: Direct and indirect exporters (eligibility criteria to be finalised by the Management Committee of the Scheme)
• Quantum of Support:
  • Up to 20% of sanctioned export working capital limit for direct exporters
  • Up to 20% of working capital limit for indirect exporters
• Maximum Loan Amount: Up to rupees 50 crore per borrower
• Tenor: 4 years (including 1-year moratorium)
• Guarantee Fee: Nil
• Interest Rate: 1% below interest rate applicable on existing facility (as on the date of issue of guidelines)
• Security: Charge on existing securities; no additional collateral required
• Eligible Lending Institutions: Scheduled Commercial Banks, SUCBs, NBFCs (RBI-registered), and specified Financial Institutions
• Validity of Scheme: Upto 31st March 2026 or until guarantees amounting to Rs.20,000 crore are issued, whichever is earlier.