Indore: Mixed reaction to RBI's interest subvention scheme

Indore (Madhya Pradesh): The exporters of the state have mixed feelings over the interest subvention scheme released by the Reserve Bank of India (RBI) on Tuesday. While they are happy that the RBI has resumed the scheme, but are unhappy over the reduction in interest rate subsidy by 2%.

The Reserve Bank of India on Tuesday issued a notification announcing the re-introduction of the Interest Equalization Scheme (interest subvention) for pre-shipment and post-shipment loans to MSME exporters. This scheme, which has been going on for the last several years, was not extended after 30 September 2021. But now it has been extended from October 1, 2021, to March 2024, with retrospective effect.

According to the notification, MSME manufacturing exporters will be given 3% interest while merchant exporters will be given 2% interest subvention as against 5% given earlier.

Suber Rampurwala, a member of the FIEO Management Committee, who hails from the city, informed that the announcement from the RBI was long-awaited for MSME exporters of the State going through tough times due to rising manufacturing and shipping costs. The reduction in cost will definitely give a boost to exports. However, small exporters are unhappy with the reduction of exemption in interest rates from 5% to 3%.