It has been observed that in increasing number of cases, the banks retain the amount of refinance obtained from State Bank under the Export Finance Scheme as deposits in their books on account of the exporters. Needless to say that this practice defeats the very purpose for which the Scheme was instituted i.e. to provide concessionary credit for boosting the exports and is, therefore, viewed seriously.

2. Banks are, therefore, advised to immediately adjust the amount of refinance in such cases by liquidating the deposits created out of such refinance and repay the same to the State Bank within three working days. They are further advised not to create fresh remunerative deposits out of the funds lent under the Export Finance Scheme . Any violation of the above directives shall disqualify the bank from availing any refinance facility from the State Bank.

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