Institutional Transition of Interest Subvention Support for Export Credit: RBI to EXIM Bank

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Dated: 08.08.2026

Institutional Transition of Interest Subvention Support for Export Credit: RBI to EXIM Bank

The Government of India has announced a significant change in the administration of the Interest Subvention Support scheme for pre- and post-shipment export credit. Effective April 1, 2026, the responsibility for implementing this scheme will transition from the Reserve Bank of India (RBI) to the Export-Import Bank of India (EXIM Bank). This article provides a comprehensive overview of the transition, its operational modalities, and what it means for exporters, lending institutions, and other stakeholders.

Background: What is Interest Subvention Support?

Interest Subvention Support is a government initiative under the Export Promotion Mission (EPM) – Niryat Protsahan. It aims to make export credit more affordable for exporters, especially Micro, Small, and Medium Enterprises (MSMEs), by providing an interest subsidy on pre- and post-shipment export credit. The scheme ensures that eligible exporters receive the benefit of reduced interest rates, thereby enhancing their competitiveness in global markets.

Key Highlights of the Transition

1. Change of Implementing Agency

Previous Framework: The scheme was initially operationalized through the RBI on a pilot basis.
New Framework: Following a decision in the 4th Steering Committee meeting, EXIM Bank will take over as the Implementing Agency from April 1, 2026.

2. Effective Date and Scope

Transition Date: EXIM Bank will manage all operational aspects, including portal management, verification, and claim settlement, from April 1, 2026.
Legacy Claims: Any supplementary or additional claims for the January–March 2026 quarter will continue to be processed by the RBI.

3. Operational Modalities

The transition involves several changes in the operational framework, as detailed below:

Guideline Section / Para	Erstwhile Provision (RBI Framework)	Modified Provision (EXIM Bank Framework Effective 01.04.2026)
HBP Chapter X Para X.2 (a) (Implementing Framework)	Lending institutions claim reimbursement from RBI.	Lending institutions claim reimbursement from EXIM Bank.
Appendix-A Para 2 (e), (f), (h) (Levels of Assistance)	Banks submit claims to RBI, reimbursement by RBI, monthly reporting by RBI.	Banks submit claims to EXIM Bank, reimbursement by EXIM Bank, monthly reporting by EXIM Bank.
Appendix-A Para 3 (d) (Credit Sanction and Claims)	RBI scrutinizes and approves claims, submits consolidated fund claims to DGFT.	EXIM Bank scrutinizes and approves claims, submits consolidated fund claims to DGFT.

All other operational provisions prescribed under previous Trade Notices remain unchanged.

What Does This Mean for Exporters and Banks?

For Exporters: The process of receiving interest subvention remains unchanged. Exporters will continue to receive the benefit upfront from their lending institutions.
For Lending Institutions: Banks will now submit reimbursement claims to EXIM Bank instead of RBI. The process, documentation, and verification requirements remain largely the same, with only the implementing agency changing.
For Policy Makers and Administrators: The transition is expected to streamline claim settlements and improve the efficiency of the scheme by leveraging EXIM Bank’s expertise in export finance.

Example: How the New Process Works

Exporter applies for export credit at a participating bank.
Bank sanctions and disburses the credit as per RBI’s Consolidated Directions on Credit Facilities.
Interest subvention is passed on upfront to the eligible MSME exporter.
Bank submits a reimbursement claim to EXIM Bank, certified by an external auditor.
EXIM Bank verifies and processes the claim, ensuring compliance with annual subvention ceilings per IEC (Importer Exporter Code).
EXIM Bank submits consolidated fund claims to the Directorate General of Foreign Trade (DGFT) through the designated portal.

Conclusion

The transition of the Interest Subvention Support scheme’s implementing agency from RBI to EXIM Bank marks a strategic move to enhance the efficiency and effectiveness of export credit support in India. Exporters and banks should familiarize themselves with the new operational modalities to ensure a smooth transition and continued access to interest subvention benefits.

In case you face any issues related to Indirect Tax-Customs, GST, Foreign Trade Policy (FTP), Arbitration matters and Central Licensing and related advisory matters in India then please feel free to get in touch with SJ EXIM Services.

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Source: DGFT

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