Banks Push for Longer Export Credit Relief as Trade Stress Persists

Indian banks have approached the Reserve Bank of India seeking an extension of the loan relief scheme for exporters as global trade stress continues to affect repayment cycles. 

The relief window currently runs from September 1 to December 31, 2025, and lenders fear a repayment shock once the moratorium ends, according to a report by NDTV Profit published on December 9, 2025

The loan relief scheme for exporters was introduced to shield export-focused businesses from delayed receivables and tariff-related disruptions. Exporters in sectors such as textiles, engineering goods, chemicals and gems and jewellery continue to face cash flow pressure due to slower demand and higher input costs, as reported by the Financial Express on September 12, 2025

Why Are Banks Seeking an Extension?

The RBI announced the relief measures via circular RBI/2025-26/92 dated November 14, 2025, allowing banks and NBFCs to offer a moratorium on export credit repayments for four months

Under the scheme, only export credit accounts classified as “standard” as of August 31, 2025 are eligible. Interest during the moratorium accrues on a simple interest basis with no compounding, a detail highlighted by Moneycontrol in its November 2025 analysis.

Another key component of the loan relief scheme for exporters is the extension of the realisation period for export proceeds from nine months to fifteen months, which the RBI clarified in a separate communication covered by Moneycontrol on November 14, 2025.

Banks argue that without an extension beyond December, repayment obligations could push stressed but viable export accounts into default. The Economic Times reported on December 8, 2025 that lenders have flagged the risk of asset quality deterioration if the relief expires abruptly.

Current Export Credit Relief Framework

How the Situation Developed Over Time?

Exporter stress intensified after tariff actions by key overseas markets and rising logistics costs. Reuters reported on November 14, 2025 that India’s central bank announced relief measures after exporters were hit by tariff-related disruptions in the US and other markets.

Earlier, exporter bodies met the RBI Governor in September 2025 to seek intervention on export credit and foreign exchange timelines, a development covered by The Economic Times on September 11, 2025.

The RBI’s relief announcement coincided with a broader regulatory overhaul in 2025. According to a December 2025 Economic Times report, the central bank introduced over 80 regulatory changes during the year, cut the repo rate four times to 5.25 percent, and scrapped several outdated compliance norms to boost credit growth.

The same report noted that inflation averaged 2.2 percent while GDP growth hovered around 8 percent, with RBI officials describing 2025 as a transition from crisis-era regulation to growth-focused oversight.

Timeline of Key Developments
 

What Stakeholders Are Saying?

Bankers quoted by NDTV Profit said extending the loan relief scheme for exporters would help avoid a spike in stressed assets while ensuring continuity of export finance. 

Exporter bodies such as FIEO have echoed these concerns, citing high costs and weak global demand, according to an Economic Times report dated September 11, 2025

Conclusion 

An analysis published by LoansJagat explains that RBI moratorium measures significantly influence exporter borrowing behaviour during periods of trade stress, improving short-term liquidity while preserving credit discipline.

As trade uncertainty lingers, banks believe extending the loan relief scheme for exporters could ensure a smoother transition toward repayment normalcy while safeguarding financial stability.
 

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