Govt amends norms for exporters availing the interest subvention support
New Delhi: India on Friday amended the norms for exporters availing the interest subvention support for pre- and post-shipment export credit January 2 onwards, as per which, the benefit will not be effective from the date on which the loan account is classified as a Non-Performing Asset (NPA).
The government also prohibited portability of Unique Identification Number (UIN) and the existing UIN would not be transferred to the new bank. Exporters said the move brings clarity on the date and conditions basis which they can avail benefits.
“In cases where the borrower repays the entire loan amount in advance before the stipulated tenure, the lending institution shall report the early foreclosure of the loan account to the RBI. Interest subvention
shall be applied only for the actual period the credit remained outstanding,” the Directorate General of Foreign Trade said in a trade notice.
To check excessive claims, exporters availing credit from multiple banks will continue to bear responsibility for ensuring that total interest subvention claims remain within the prescribed annual ceiling, according to the amendments.
Moreover, banks may now obtain undertakings from exporters confirming that cross-bank claims do not exceed the Rs 50 lakh per Import Export Code (IEC) limit.
“Banks were intimated about the changes a few days ago and now exporters a have been informed. These are more of streamlining measures for both trade and banks to be on the same page,” said an industry representative.
To improve efficiency and reduce processing delays, detailed digital workflow has been introduced for claim submission: mandatory registration of banks on the DGFT portal, online submission of reimbursement claims, entry and validation of borrower UINs, and submission of additional loan-related data in prescribed formats.
The amendments also address the inclusion and exclusion of tariff lines in the Positive List. As per the amendments, no retrospective benefits will be granted, subvention applies only to credit disbursed after inclusion of a tariff line and if a tariff line becomes ineligible later, pre-shipment credit already disbursed remains eligible, but post-shipment credit will not qualify thereafter
The government also prohibited portability of Unique Identification Number (UIN) and the existing UIN would not be transferred to the new bank. Exporters said the move brings clarity on the date and conditions basis which they can avail benefits.
“In cases where the borrower repays the entire loan amount in advance before the stipulated tenure, the lending institution shall report the early foreclosure of the loan account to the RBI. Interest subvention
shall be applied only for the actual period the credit remained outstanding,” the Directorate General of Foreign Trade said in a trade notice.
To check excessive claims, exporters availing credit from multiple banks will continue to bear responsibility for ensuring that total interest subvention claims remain within the prescribed annual ceiling, according to the amendments.
Moreover, banks may now obtain undertakings from exporters confirming that cross-bank claims do not exceed the Rs 50 lakh per Import Export Code (IEC) limit.
“Banks were intimated about the changes a few days ago and now exporters a have been informed. These are more of streamlining measures for both trade and banks to be on the same page,” said an industry representative.
To improve efficiency and reduce processing delays, detailed digital workflow has been introduced for claim submission: mandatory registration of banks on the DGFT portal, online submission of reimbursement claims, entry and validation of borrower UINs, and submission of additional loan-related data in prescribed formats.
The amendments also address the inclusion and exclusion of tariff lines in the Positive List. As per the amendments, no retrospective benefits will be granted, subvention applies only to credit disbursed after inclusion of a tariff line and if a tariff line becomes ineligible later, pre-shipment credit already disbursed remains eligible, but post-shipment credit will not qualify thereafter
Next Story