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As per RBI data, the balance outstanding for export credit by all Scheduled Commercial Banks (SCBs) increased from Rs 1,85,591 crore as on 31.3.2015 to Rs 2,43,890 crore as on 31.3.2018 before declining to Rs 2,26,363 crore as on 31.3.2019. The Government has taken some major steps to increase the flow of credit to micro, small and medium enterprises (MSME) exporters as, raising interest equalization rate under Interest Equalisation Scheme (IES) from 3 per cent to 5 per cent for MSME exports; including Merchant exporters under IES for Pre and Post Shipment Rupee Export Credit; facilitating export under GST by permitting Letter of Undertaking in place of bond with no bank guarantee for exporting goods or services or both.
Further, allowing merchant exporters to procure goods from domestic suppliers, for export, with nominal GST of 0.1 per cent; provisional sanction of 90 per cent GST refund amount for exports within 7 days; reducing insurance premium rates by an average of 17 per cent for export credit. The department of Financial Services has informed that RBI is currently examining the priority sector lending norms for export credit and certain enabling guidelines are under consideration. When issued, revised guidelines are expected to release additional Rs.350-680 billion export credit under priority sector. The Reserve Bank of India has informed that it is not in favour of earmarking a part of foreign exchange reserves for export credit.