# Does a bank's export credit to my company count as priority sector lending?

Canonical: https://senseible.earth/answers/does-export-credit-count-as-priority-sector

If your company is an MSME, yes: export credit to MSMEs counts under the MSME category, like any other MSME loan. For larger exporters, a domestic bank can count only the rise in export credit over the same date last year, up to 2% of its adjusted net bank credit, for borrowers with sanctioned limits up to ₹50 crore.

## What counts as export credit

RBI's 2025 Directions define export credit as pre-shipment and post-shipment credit, as set out in its Credit Facilities Directions. Off-balance sheet items are excluded, so a guarantee or an unfunded letter of credit does not count.

## MSME and farm exporters

Export credit to MSMEs and to agriculture is classified in those categories. Since all bank loans to MSMEs qualify as priority sector, a Udyam-registered exporter's packing credit or bill discounting counts in full under MSME, with no export-specific ceiling.

## Larger exporters

- Domestic banks, wholly owned subsidiaries of foreign banks, small finance banks and urban co-operative banks: only incremental export credit over the corresponding date of the previous year counts, up to 2% of adjusted net bank credit or the off-balance sheet equivalent, whichever is higher, and only for borrowers with a sanctioned limit up to ₹50 crore.
- Foreign banks with 20 or more branches: incremental export credit up to the same 2% ceiling, with no per-borrower limit in the table.
- Foreign banks with fewer than 20 branches: export credit can make up to 32% of adjusted net bank credit within their 40% priority sector target.
- Regional rural banks and local area banks: this export credit rule does not apply.

## Why it matters to you

Banks must lend 40% of adjusted net bank credit to the priority sector. A loan that counts towards that target is one a bank wants on its books, which helps when you negotiate limits. Classification alone does not fix your interest rate.

## Example: a large exporter at a domestic bank (illustrative)

- Export credit outstanding on 30 June last year: ₹30 crore
- Export credit outstanding on 30 June this year: ₹38 crore, sanctioned limit ₹45 crore
- Eligible as priority sector: the ₹8 crore increase, within the bank's overall 2% ceiling

Figures are illustrative. A borrower with a sanctioned limit above ₹50 crore would not qualify at a domestic bank.

## What Senseible does here

Senseible does not classify loans. For exporters it turns fuel and power bills into a dated emissions record that you can share with EU buyers who ask for one.

- [Do all MSME loans count as priority sector](https://senseible.earth/answers/do-all-msme-loans-count-as-priority-sector)
- [Udyam registration for bank loans](https://senseible.earth/answers/udyam-registration-needed-for-bank-loan)
- [Priority sector limit for renewable loans](https://senseible.earth/answers/psl-renewable-energy-loan-limit-2025)

Sources: [RBI, Master Directions (Priority Sector Lending, Targets and Classification) Directions, 2025, updated 11 September 2026: para 7.1 (targets), para 10 (MSME) and para 11 (export credit)](https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=12799)

Last reviewed 2026-10-24.