The Reserve Bank on Tuesday extended the interest equalisation scheme for pre and post shipment rupee credit for MSME exporters till March 2024 with the objective of boosting outbound shipments.

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Exporters get subsidy under the 'Interest Equalisation Scheme for pre and post-shipment Rupee Export Credit'.

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In April last year, the scheme was first extended till June end and later till September 2021.

The interest equalisation rates under the scheme have been revised to 2 per cent and 3 per cent for specified categories of MSME manufacturer exporters, the RBI said.

"The government has approved the extension of Interest Equalization Scheme for Pre and Post Shipment Rupee Export Credit up to March 31, 2024 or till further review, whichever is earlier. The extension takes effect from October 1, 2021 and ends on March 31, 2024," the RBI said in a notification.

The scheme will not apply to telecom instruments and entities availing benefits under the Production Linked Incentive (PLI) scheme of the government.

While issuing approval to the exporter, the bank will be required to furnish the prevailing interest rate, the interest subvention being provided, and the net rate being charged to each exporter, so as to ensure transparency and greater accountability in the operation of the scheme, the RBI said.

It further said from April 1, 2022, banks shall reduce the interest rate charged to the eligible exporters upfront as per the guidelines and submit the claims in original within 15 days from the end of the respective month in the prescribed format.

The RBI further said for the October 1, 2021 to March 31, 2022 period, banks shall identify the eligible exporters as per the scheme, credit their accounts with the eligible amount of interest equalisation and submit sector-wise consolidated reimbursement claim for the period to the Reserve Bank by April 30, 2022.

India's merchandise export in February 2022 was USD 33.81 billion, an increase of 22.36 per cent over USD 27.63 billion in the same month of 2021.