The Reserve Bank of India (RBI) provides export credit refinance (ECR) facility to banks under section 17(3A) of the Reserve Bank of India Act 1934. This facility is given on the basis of banks’ eligible outstanding rupee export credit both at the pre-shipment and post-shipment stages. The quantum of refinance is fixed from time to time based on the stance of monetary policy of the RBI. At present, the scheduled banks are provided export credit refinance to the extent of 32.0 per cent of the outstanding export credit eligible for refinance as at the end of the second preceding fortnight. This limit was reduced from 50.0 per cent to 32.0 per cent, vide RBI circular No.MPD.BC.372/07.01.279/2013-14 dated June 3, 2014. However, there is no cap on refinance of export bills purchase from individual exporters in the RBI refinance guidelines. The banks use the refinance facility to meet from time to time their own (banks) liquidity requirements. 

Estimated Bank Group-wise utilization of ECR during last 3 years is as under:

Year	Nationalized banks	Private banks	Foreign banks
2012-13	129.1	15.0	4.4
2013-14	241.0	33.7	20.1
2014-15(so far)	154.1	21.7	13.2

The data indicates that the availment of refinance facility is at similar high level as prevailing in 2013-14.

 This was stated by Shri Jayant Sinha, Minister of State in Ministry of Finance in written reply to a question in the Lok Sabha today.

Export credit refinance supports banks' liquidity by allowing refinance of eligible export credit, subject to RBI-set limits. Export credit refinance under section 17(3A) enables scheduled banks to obtain refinance on eligible rupee export credit at pre- and post-shipment stages. The Reserve Bank sets the quantum of refinance, currently fixed at 32% of outstanding eligible export credit as of the end of the second preceding fortnight; there is no cap on refinance of export bills purchase from individual exporters. Banks deploy the facility to manage liquidity, with recent utilisation by bank groups remaining at high levels comparable to the prior year.