Interest Equalization scheme

This query is : Resolved

Mahendra Patel (Querist)
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28 March 2022 Dear Sir,

We are regularly export to material other country and we have also sanction Cash credit limit from bank (along with sub limit of Export credit).

RBI Closed interest subvention scheme from oct-2021 for export which open again on 08.03.2022 As per RBI notification dated 08.03.2022 RBI/2021-22/180 DOR.STR.REC.93/04.02.001/2021-22.

So our question is hear can we claim under this scheme our past consignment interest subvention ???

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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09 July 2024 Based on the RBI notification, which reopened the interest subvention scheme for exports, you may be able to claim interest subvention for your past consignments. Here’s a breakdown of the situation and how you can proceed:

Understanding the Interest Subvention Scheme:

1. Scheme Details: The RBI periodically announces schemes to provide interest subvention or interest equalization on export credit to support exporters. These schemes aim to reduce the cost of credit for exporters and enhance their competitiveness in international markets.
2. Period Covered: The scheme you mentioned reopened on 08.03.2022. This means it applies to eligible export transactions from that date onward.
3. Past Consignments: Generally, schemes like these do not retroactively apply to transactions before the scheme’s effective date unless specified otherwise in the notification. Therefore, exports made before 08.03.2022 may not automatically qualify for interest subvention under this reopened scheme.

Steps to Consider:

1. Review Notification: Carefully review the RBI notification dated 08.03.2022 to understand its specific provisions, eligibility criteria, and the period covered for claiming interest subvention.
2. Consult with Bank: Contact your bank, which manages your cash credit limit and export credit sub-limit, to discuss the applicability of the interest subvention scheme to your past export consignments.
3. Documentation: Gather all relevant documentation related to your past export transactions and the interest charged during those periods. This includes invoices, export declarations, shipping documents, and bank statements showing the interest charged.
4. Claim Process: If the scheme allows for retrospective claims or if there are provisions for exceptional cases, prepare a detailed claim with supporting documents as per the scheme’s requirements. Submit this claim to your bank or the relevant authority as specified in the scheme notification.
5. Professional Advice: Given the complexities involved in such schemes and the potential financial implications, consider seeking advice from a financial advisor or a consultant specializing in export finance and RBI schemes. They can provide specific guidance based on your circumstances and help maximize your eligibility for the interest subvention.

Conclusion:

While the scheme has reopened and may provide opportunities for interest subvention on new export transactions, claiming for past consignments typically requires adherence to the scheme’s specific provisions and timelines. Review the RBI notification and consult with relevant professionals to ensure compliance and optimize your eligibility under the scheme.