ANNOUNCEMENT 03 Jun 2014
In June 2014, the Reserve Bank of India reduced the limit on refinancing of export credit by the commercial banks with the RBI from 50% to 32%. This limit was further reduced to 15% in October 2014.
NUMBER OF INTERVENTIONS
Effective 3 June 2014, the Reserve Bank of India (RBI) reduced the limit of the Export Credit Refinance facility that allows banks to raise funding from the RBI to a certain extent of the export credit lent out by these banks. With the amendment, scheduled commercial banks can now raise credit from the RBI up to only 32% of their outstanding rupee export credit volume. Prior to the change, banks were allowed to refinance up to 50% of this asset class.
On 10 October 2014, the RBI reduced the limit on the Export Credit Refinance facility again from 32% to 15% of the outstanding rupee export credit.
Since 7 February 2015, the RBI subsumed the ECR within their regular liquidity provision framework wherein the RBI lends money to the commercial banks for contracts of varying maturity dates. No explicit provision is therefore made for export based refinancing.