RBI cautions banks on interest rate subvention to exporters

RBI cautions banks on interest rate subvention to exporters
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First Published: Fri, Aug 14 2009. 10 30 PM IST
Updated: Fri, Aug 14 2009. 10 30 PM IST
Mumbai: The Reserve Bank of India (RBI) on Friday said some banks have furnished certificates of extending interest rate subvention, or discount, to exporters even when they actually did not pass on the benefit or delayed doing so.
Banks are required to give 2% and 4% interest rate subventions to certain categories of exporters upfront at the time of disbursing the loan and claim it from RBI as reimbursement.
“ … banks are advised to ensure strict adherence to the extant instructions and initiate corrective measures to ensure strict compliance to the guidelines. Further, the banks may examine the wrong certification, if any, by the auditors and take appropriate action under advice to us,” RBI said in a notification to banks.
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First Published: Fri, Aug 14 2009. 10 30 PM IST