RBI/2004-05/13 Ref. MPD. No.252/07.01.279/2004-05 July
3, 2004 Aashadha 12, 1926(S) The Chairmen/Chief Executives of
all Scheduled Banks (excluding RRBs) Dear Sirs, Master
Circular on Export Credit Refinance Facility As
you are aware, the Reserve Bank of India has, from time to time, issued a number
of guidelines/instructions/directives to banks in regard to matters relating to
Export Credit Refinance Facility. To enable banks to have current instructions
at one place, a Master Circular incorporating all the existing guidelines/instructions/directives
on the subject has been prepared. It may be noted that this Master Circular consolidates
and updates all the instructions/guidelines contained in the circulars issued
upto June 30, 2004, in so far as they relate to providing rupee export credit
refinance to banks. This Master Circular has been placed on the RBI website at
www.mastercirculars.rbi.org.in.
Yours faithfully (D.
Anjaneyulu) Principal Monetary Policy Adviser Encls.: As
above
Master Circular on Export Credit Refinance (ECR) Facility 1. Introduction 1.1
In order to encourage banks to extend more liberal export credit, the Reserve
Bank of India provides export credit refinance facility to banks under Section
17(3A) of the Reserve Bank of India Act 1934. This facility is given on the basis
of banks' eligible outstanding rupee export credit both at the pre-shipment and
post-shipment stages. The quantum of refinance is fixed from time to time based
on the stance of monetary and credit policy of the Reserve Bank of India (RBI).
2. Participants 2.1
All scheduled banks (excluding RRBs), which are authorised dealers in foreign
exchange and have extended export credit are eligible to avail of export credit
refinance. 3. Export
Credit Refinance Facility 3.1
The definition of outstanding export credit reckoned for the purpose of calculation
of export credit refinance limits of banks had been modified effective April 27,
2000. Outstanding export credit for working out refinance limits, accordingly,
includes export bills rediscounted with EXIM Bank/other banks/Financial Institutions
and export credit against which refinance has been obtained from NABARD/EXIM Bank.
However, it will not include Pre-shipment Credit in Foreign Currency (PCFC), export
bills discounted/rediscounted under the scheme of 'Rediscounting of Export Bills
Abroad' (EBR), overdue rupee export credit and other export credit not eligible
for refinance. With the modified definition, the banks have the benefit of rediscounting
export bills with institutions like EXIM Bank, without sustaining reduction in
refinance limits from RBI. 4. Limit 4.1
At present, the scheduled banks are provided export credit refinance to the extent
of 15.0 per cent of the outstanding export credit eligible for refinance as at
the end of the second preceding fortnight. 5. Interest
Rate 5.1
Export credit refinance facility is available at the Reverse Repo Rate (which
is linked to Repo Rate under Liquidity Adjustment Facility (LAF), as announced
from time to time. 5.2 Interest
shall be payable with monthly rests and the amounts of such interest calculated
on daily balances would be debited to the account of such advances at the end
of respective month or earlier when the balance outstanding is wiped out. 6. Margin
Requirement 6.1 No margin is required to be maintained. 7. Duration
7.1 Repayable on demand or on the expiry of fixed periods not
exceeding one hundred and eighty days. 8. Collateral 8.1
RBI extends the export credit refinance against the Demand Promissory Note (DPN)
of banks supported by a declaration that they have been extended export credit
and the outstanding amount eligible for refinance is not less than the loan/advance
from RBI. 9. Minimum
Amount of Availment 9.1 The
minimum amount of availment under this facility is Rupees one lakh and multiples
thereof above the minimum. 10. Place
of Availment 10.1 This facility
can be availed of at centres wherever the Reserve Bank has a Banking Department. 11. Repayment
11.1 The refinance has to
be repaid on demand or within 180 days. 12. Penalties
12.1 In the event of
a scheduled bank having irregular availment of export credit refinance, a penal
rate of interest as decided by the Reserve Bank from time to time will be charged
on the outstanding loan or loans. 12.2
The instances on which penal rate would be applicable for irregular availment
of export credit refinance are set out in Table 1.
Table
1: Illustration of Irregular Availment of Export Credit Refinance |
a) |
Utilisation
of ECR exceeds the total limit. |
b) |
Wrong
calculation/ reporting of refinance limit by banks. |
c) |
Non-repayment
of refinance within 180 days. |
d) |
Delay
in reporting excess utilisation by banks. | 13. Documentation 13.1
The banks have to execute the following documents for availing of export credit
refinance facility: - A
stamped agreement in Form No. DAD 297.
- A
Demand Promissory Note (DPN) in Form No. DAD 295 A.
- Board
Resolution in Form No. DAD 298 authorising the borrowing under the scheme and
also the officials who will execute loan documents on behalf of the bank.
- For
enhancement of limit, a letter in Form No. DAD 299 extending the agreement to
enhance limit together with consolidated DPN for the fresh limit.
- In
terms of Para 7.30 of Banking Department Manual, Agreements and letters of extension
need not be renewed so long as there is no change in the terms thereof. DPN should,
however, be renewed every three years of their dates of execution not withstanding
their validity for three years from the date of transaction.
13.2
The borrowing bank should submit to Monetary Policy Department, Reserve Bank of
India, a fortnightly declaration in form No. DAD.389 together with a statement
of Export Refinance Entitlement in form No.DAD.390 to enable Reserve Bank of India
to monitor the position of the outstanding borrowings under the scheme in relation
to its outstanding export credit advances. 14. Reporting
Requirement 14.1 The availing
banks are required to report their outstanding export credit eligible for refinance
within five days from the relevant date in the format provided in Annex I.
15. Condition 15.1 It
is essential that the outstanding borrowings at all times are fully covered by
the borrowing bank’s holding of export bills/amount of eligible pre-shipment advances
as reported in their latest declaration. If at any time it is found that the total
amount of bills held by banks/amount of eligible pre-shipment advances covered
by the declaration falls below the amount borrowed, the bank should forthwith
adjust or repay excess refinance from Reserve Bank of India.
Annex
I Reporting
Formats Form DAD 389
Name
of the Bank ________________________________________________________ |
Statement
showing the Export Credit Refinance Limit for the fortnight ended_______ |
PART
- A | (Rs.
in lakh) | 1. |
Outstanding Export Credit (as redefined)
as on @ * | ____________ |
2. |
Export Credit Refinance Limit (15
percent of item no. 1) | ____________ |
* Outstanding Export
Credit for the purpose of working out refinance limits will be aggregate export
outstanding export credit minus Pre-shipment Credit in Foreign Currency
(PCFC), Export bills discounted/rediscounted under the scheme of 'Rediscounting
of Export Bills Abroad', Overdue Rupee Export Credit not eligible for refinance
but including Export bills rediscounted with other banks/Exim Bank
/ Financial Institutions, Export Credit against which refinance has been obtained
from NABARD/Exim Bank. @ Export Credit outstanding as on
the last Friday of the second preceding reporting fortnight.
PART - B |
Aggregate
Export Credit Outstanding as on @ |
(Rs. in lakh) |
1. |
Aggregate Export Credit Outstanding
____________ | |
of which - | |
| (i)
Export bills rediscounted with other banks/Exim Bank / Financial Institutions |
____________ | |
(ii) Export Credit against which
refinance has been obtained from NABARD/Exim Bank |
____________ | |
(iii) Pre-shipment Credit in Foreign
Currency (PCFC) | ____________ |
| (iv)
Export bills discounted/rediscounted under the scheme of 'Rediscounting of Export
Bills Abroad' | ____________ |
| (v)
Overdue Rupee Export Credit | ____________ |
| (vi)
Export Credit not accounted for above ( i to v) and not eligible for refinance* |
____________ |
2. |
Outstanding export credit eligible
for refinance Item 1 minus {(i) + (ii) +
(iii) + (iv) + (v) + (vi)} | ____________ |
PART - C |
Export
Credit Outstanding as on @ |
(Rs. in lakh) |
1. |
Pre-shipment Rupee Export Credit
** | |
- Upto 180 days
- Beyond
180 days and upto 270 days
Total ( i + ii) |
|
2. |
Post-shipment Rupee Export Credit
** Upto 180 daysBeyond
180 days and upto 270 days Total ( i + ii) |
____________ |
3. |
Total Rupee Export Credit (1 + 2) |
____________ |
------------------------------------------------------------------------------------------------------------------------ @
Aggregate Export Credit outstanding as on the last Friday of the second preceding
reporting fortnight. * e.g., in case packing credit is sanctioned
for more than 180 days, for the period upto 180 days, the outstandings should
be shown against item 2 for the periods beyond 180 days, the outstandings should
be shown against item 1(vi). ** Including overdues. |
Annex
II Definitions In
these guidelines, unless the context otherwise requires: - "Fortnight"
shall mean the period from Saturday to the second following Friday, both days
inclusive;
- "Bank"
or "banking company" means a banking company as defined in clause (c) of
Section 5 of the Banking Regulation Act, 1949 (10 of 1949) or a "corresponding
new bank", "State Bank of India" or "subsidiary bank" as defined in clause (da),
clause (nc) and clause (nd) respectively thereof and includes a "co-operative
bank" as defined in clause (cci) of Section 5 read with Section 56 of that Act.
- "Scheduled bank" means a bank included in the Second Schedule of the
Reserve Bank of India Act, 1934.
- "Export
Bills" means all export bills having a usance not exceeding 180 days purchased/negotiated/discounted
by the borrowing bank under letters of credit or otherwise which are drawn in
India or any country outside India which is a member of the International Monetary
Fund or any other country notified in this behalf by the Bank in the Gazette of
India would be eligible for inclusion in the declaration to be furnished by it.
- "Pre-shipment Credit"
means the credit granted by banks to bonafide exporters on the strength of letters
of credit established by banks of good standing abroad in favour of the local
exporter or on the strength of firm export order and the borrowing bank should
ensure that the relevant documents are lodged with it.
- "Export
credit eligible for refinance" means the aggregate outstanding export credit as
on the last Friday of the second preceding reporting fortnight minus Pre-shipment
Credit in Foreign Currency (PCFC), Export bills discounted/rediscounted under
the scheme of 'Rediscounting of Export Bills Abroad' (EBR), overdue rupee export
credit and other export credit not eligible for refinance, export bills rediscounted
with other banks/Exim Bank/Financial Institutions and export credit against which
refinance has been obtained from NABARD/EXIM Bank.
Annex
III Form of Agreement DAD
297 Para 7.50 Form
of agreement to be obtained from the Principal Office of the scheduled bank for
borrowings in respect of bank finance for exports of goods (to be stamped as an
agreement in accordance with the law in force in each state) The
Reserve Bank of India Dear Sirs, In
consideration of your agreeing to make from time to time, under section 17(3A)
of the Reserve Bank of India Act, and on the terms and conditions contained in
the Memorandum attached to the circular DBOD.No.BM.78/C.297(M)-69 dated the 20th
January 1969 advance in your discretion but not in any event exceeding the sum
(exclusive of interest) of Rs………….. for which amount we have delivered to you
a demand promissory note in your favour carrying interest at the rate hereinafter
mentioned, which advances shall be repayable on demand and shall be made upon
declaration in such forms as may be prescribed by you. We agree as follows: (1) The
balance of the said advances at any time outstanding shall be repayable by us
to you on demand. (2) Each drawal
of advances under this agreement shall have a maturity period not exceeding 180
days and shall be repayable by us within the said period. (3) Interest
shall be payable by us to you at such rate as may be notified by you from time
to time, with monthly rests and the amounts of such interest calculated on the
daily balances may be debited to the account of the said advances at the end of
each respective month or earlier when the balance outstanding is wiped out. It
shall be open to you to reimburse yourself with the amount of interest so debited
by charging the same to our current account with you. (4) We
agree that in default of payment by us under the terms of clauses (1) and (2)
hereof, you may, but without any obligation on your so to do, debit our current
account with you for the amount due by us on account of the loan of advance granted
in terms of Section 17(3A) of the said Act. (5) We
agree and undertake that the loan or advance granted by us to exporters or other
persons eligible for refinance in order to enable them to export goods from India
and drawn and outstanding at any time shall not be less than the outstanding amount
of the loan or advance obtained by us from you. We further agree to maintain in
your favour such margin as you may from time to time prescribe so that the shortfall
in the margin stipulated therein, we shall forthwith on demand by you reduce the
balance due to you by a cash payment so as to make good the amount of margin required
to be maintained. (6) We further agree that we will from
time to time, while these advances continue and whenever required by you to do
so furnish you with such information regarding the outstanding in the advances
made by us in respect of export of goods eligible for refinance and true reports
in such as you may prescribe regarding the solvency of the borrowers and agree
to advise you promptly of any change in the position of any such borrower which
can be reasonably be considered to affect our security. (7) We
hereby agree to execute on demand such documents as may be required by you to
create in your favour an overall charge on our book debts represented by the advances
made by us in respect of export of goods eligible for refinance or to vest in
you such security as are specified by you so as to render the same readily saleable
or transferable by you at any time. (8) We
agree and undertake to pay interest at such higher rate as you may decide, in
the following cases; where
- Export Credit Refinance utilisation is in excess of the
limit allowed,
- Refinance limits are calculated
or reported wrongly,
- Drawals remain outstanding
beyond 180 days on account of insufficient fund in our account
- There
is long delay in reporting about the excess or irregular utilisation by us for
the period of delay.
(9) We
also agree that this agreement and said demand promissory note for Rs………… shall
operate as a continuing security for the said advance notwithstanding the existence
of a credit balance at any time or any partial payment or fluctuations of accounts
or withdrawal of any part of the security. Yours
faithfully For
and on behalf of … … … … … … (Name of the schedule Bank) (Signature
of authorized official) (Designation).
DAD
295A (On the letter head) DEMAND
PROMISSORY NOTE (Export Credit Refinance Facility)
On demand, we, (Bank's Name), promise to pay to the
Reserve Bank of India or order the sum of Rs…………….. (Rupees …………………………………………………………)
with Interest at reverse repo rates as announced by Reserve Bank of India for
export credit refinance facility at the time of full repayment or at monthly rests
whichever is earlier for value received. Place:
For and on behalf of…… Date:
(2 Signatories & revenue stamp) Names & Designation
of both signatories DAD-298 Para
7.71
Specimen
of Board Resolution
A copy of the Board Resolution
No. … … … …………………….. Passed at the meeting of the board held on …………………………….. "Resolved
- - that
the bank to borrow from the Reserve Bank of India in terms of Pre-shipment Credit
Scheme and/or Export Bills Credit Scheme under Section 17(3A) or the Reserve Bank
of India Act 1934 upto the limit that may be approved and upon such terms and
conditions as may be imposed by the Reserve Bank of India from time to time;
- that
the following officers of the bank be and are hereby severally empowered to execute
and furnish the necessary agreements, loan documents, declarations, statements
and certificates on behalf of the bank for the purpose of availing of the above
mentioned facilities from the Reserve Bank of India and such other instruments
and documents as may be required by the Reserve Bank of India in this behalf.
FORM 'D' DAD-299
Date:
The Reserve Bank of India Deposit
Accounts Department Mumbai-400 001 Dear Sir With
reference to the Agreement dated …………………….. we agree that in consideration of
your agreeing to increase the limit of Rs………………….(………………………………………………………………………………………………)
specified therein to a fresh limit of Rs…………. ( Rupees ………………………………………………………………………)
for which amount we have delivered to you a consolidated demand promissory note,
carrying interest at ……. p.a. with monthly rests, all the terms of the said agreement
shall apply to and in relation to the fresh limit of and the consolidated demand
promissory note for Rs…………….. (Rupees ……………………………………………………………….) and the advances
thereunder, as they apply to and in relation to the limit of and demand promissory
note for Rs………….. (Rupees ……………………………………. ) and the advances thereunder. Yours
faithfully, For
and on behalf of (Name of the scheduled Bank)
Appendix List
of Circulars
Sr.No. |
Circular Number |
Subject |
1. | DBOD.No.BM.2732/C.297/K-63
dated March 13, 1963 | Export
Bills Credit Scheme | 2. |
DBOD.No.BM.78/C.297(M)-69 dated January
20, 1969 | Refinancing
of Pre-shipment Credit | 3. |
DBOD.No.B.M.931/C.297P-69 dated June
9, 1969 | Refinancing
under section 17(3A) of the Reserve Bank of India Act, 1934 - Pre-shipment Credit
Scheme | 4. |
CPC.No.BC.45/279A-81 dated March
18, 1981 | Export
Refinance. | 5. |
CPC.No.BC.46/279A-81 dated May 27,
1981 | Interest
Rate on Export Credit Refinance |
6. | CPC.No.BC.60/279A-82
dated October 25, 1982 | Changes
in Interest Rate on Export Credit Refinance |
7. | CPC.No.BC.64/279A-83
dated October, 1983 | Export
Credit Refinance | 8. |
CPC.No.BC.77/279A-85 dated October
25, 1985 | Export
Credit Refinance | 9. |
CPC.No.BC.79/279A-86 dated August
1, 1986 | Export
Credit Refinance- Change in Interest Rate |
10. | CPC.No.BC.91/279A-88
dated April 2, 1988 | Export
Credit Refinance | 11. |
CPC.No.BC.98/279A-89 dated March
27, 1989 | Export
Credit Refinance | 12. |
CPC.No.BC.103/279A-90 dated April
12, 1990 | Export
Credit Refinance | 13. |
CPC.No.BC.111/279A-91 dated April
12, 1991 | Export
Credit Refinance | 14. |
CPC.No.BC.115/279A-91 dated September
3, 1991 | Export
Credit Refinance | 15. |
CPC.No.BC.116/279A-91 dated October
8, 1991 | Export
Credit Refinance | 16. |
CPC.No.BC.122/279A-92 dated April
21, 1992 | Rates
of Interest on Export Credit Refinance ((Rupee) and Refinance for Post-Shipment
Credit denominated in US Dollars |
17. | CPC.No.BC.123/279A-92
dated April 23, 1992 | Export
Credit Refinance ((Rupee) and Refinance Against Post-Shipment Export Credit Denominated
in US Dollars | 18. |
CPC.No.BC.129/07.01.279/92-93 dated
April 7, 1993 | Export
Credit (Rupee) Refinance and Refinance Against Post-Shipment Export Credit Denominated
in US Dollars | 19. |
CPC.No.BC.132/07.01.279/93-94 dated
October 11, 1993 | Export
Credit (Rupee) Refinance and Refinance against Post-Shipment Export Credit Denominated
in US Dollars | 20. |
CPC.No.BC.136/07.01.279/93-94 dated
May 14, 1994 | Export
Credit (Rupee) Refinance and Refinance against Post-Shipment Export Credit Denominated
in US Dollars | Sr.No. |
Circular Number |
Subject |
21. | CPC.No.BC.144/07.01.279/94-95
dated April 17, 1995 | Interest
Rates on Term Deposits | 22. |
CPC.No.3559/03.02.15/94-95 dated
April 20, 1995 | Export
Credit Refinance | 23. |
UBD.DS.SUB.CIR.3/13.04.00/95-96 dated
February 7, 1996 | Interest
Rates on Advances | 24. |
CPC.No.2101/03.02.01/95-96 dated
January 15, 1996 | Refinance
against Post-shipment Export Credit denominated in US Dollars (PSCFC) |
25. |
CPC. /03.02.01/95-96 dated February
7, 1996 | Export
Credit Refinance | 27. |
CPC.No.3466/03.02.01/95-96 dated
April 4, 1996 | Export
Credit Refinance | 28. |
IECD.No.10/04.02.01/96-97 dated October
19, 1996 | Interest
rates on advances - Post-shipment Rupee Credit |
29. | CPC.No.1067/03.02.01/96-97
dated October 23, 1996 | Export
Credit Refinance | 30. |
CPC.No.2652/03.02.01/96-97 dated
April 21, 1997 | Export
Credit Refinance | 31. |
MPD.No.2035/03.02.01/97-98 dated
January 16, 1998 | Reserve
Bank Refinance | 32. |
CPC.No.2662/03.02.01/97-98 dated
March 18, 1998 | Interest
Rates on Refinance Facilities from the reserve Bank of India |
33. |
MPD.No.2932/03.02.01/97-98 dated
April 2, 1998 | Interest
Rates on Refinance Facilities from the reserve Bank of India |
34. |
MPD.No.3121/03.02.01/97-98 dated
April 29, 1998 | Refinance
Facilities from the Reserve Bank of India |
35. | MPD.BC.No.177/07.01.279/97-98
dated June 11, 1998 | Interest
Rate on Export Credit | 36. |
MPD.49/03.02.01/98-99 dated July
8, 1998 | Export
Credit Refinance | 37. |
MPD.BC.No.179/07.01.279/98-99 dated
August 6, 1998 | Interest
Rate on Export Credit and Export Credit Refinance |
38. | MPD.No.1018/03.02.01/98-99
dated October 15, 1998 | Fortnightly
Statement showing Export Credit Refinance Limits |
39. | MPD.BC.No.182/07.01.279/98-99
dated March 1, 1999 | Bank
Rate and Export Credit Refinance Rate |
40. | MPD.BC.No.184/07.01.279/98-99
dated March 1, 1999 | Interest
Rate on Export Credit and Export Credit Refinance | 41. | MPD.3278/03.02.01/99-2000
dated April 1, 2000 | Interest
Rates on Export Credit Refinance and Collateralised Lending Facilities |
42. |
MPD.3538/03.02.01/99-2000 dated April
27, 2000 | Liberalised
Export Credit Refinance Facility |
43. | MPD.BC.No.198/07.01.279/2000-01
dated July 21, 2000 | Bank
Rate | 44. |
MPD.BC.No.200/07.01.279/2000-01 dated
July 21, 2000 | Export
Credit Refinance and Collateralised Lending Facility |
45. | MPD.2992/03.02.01/2000-01
dated April 21, 2000 | Standing
Liquidity Facilities Scheme |
46. | MPD.3115/03.02.01/2000-01
dated April 30, 2001 | Standing
Liquidity Facilities Scheme |
Sr.No. |
Circular Number |
Subject |
47. | MPD.BC.No.213/02.01.279/2001-02
dated March 18, 2002 | Export
Credit Refinance Scheme | 48. |
MPD.BC.No.223/07.01.279/2002-03 dated
October 29, 2002 | Export
Credit Refinance Facility | 49. |
MPD.BC.No.232/07.01.279/2002-03 dated
April 29, 2003 | Export
Credit Refinance Facility | 50. |
MPD.BC.No.243/07.01.279/2003-04 dated
November 5, 2003 | Rationalisation
of Standing Facilities | 51. |
MPD.BC.No.246/07.01.279/2003-04 dated
March 25, 2004 | Standing
Liquidity Facilities for Banks for Export Credit and Primary dealers (PDs): Rationalisation |
52. |
MPD.BC.No.247/07.01.279/2003-04 dated
April 07, 2004 | Standing
Liquidity Facilities for Banks for Export Credit: Rationalisation |
|