Sharma to review export credit with bankers next month

Amid increase in interest rates, Commerce and Industry Minister Anand Sharma today said he will review the availability of credit to exporters next month along with the bank chiefs and finance ministry officials.

"I have called for the review with Banking Secretary (R Gopalan) and banks chiefs to see that what has been made available, as well as credit to the exporters and if anything require to be done we will address that issue," Sharma told reporters before leaving for Malaysia.

From there he would be traveling to Vietnam to participate in the ASEAN-India Summit and East Asia Summit.

The review meeting is likely to take place soon after Sharma returns home.

Referring to "increase in export credit rate under base rate" regime, The Federation of Indian Export Organisations (FIEO) said that in earlier system (prime lending rate (PLR) regime), exporters were getting pre and post shipment credit at least 2.5 per cent below the PLR but in the base rate regime banks have been freed to charge interest rate above the base rate".

"Banks are charging export credit 150 to 200 basis points above the base rate, which makes the export credit rate under the Base Rate Regime more costlier than in the PLR regime," FIEO President A Sakthivel said.

The apex body of exporters has urged the Reserve Bank of India to instruct banks to provide export credit at the base rate itself.

The chamber also said export credit as a percentage of net bank credit is on decline and fell to 4.1 per cent on January 15.

Sakthivel attended the mid-term credit policy review meeting with the RBI Governor D Subbaro in Mumbai today and appraised the central bank about the concerns of exporters on the volatility in the exchange rate.

However, Sharma said: "We do not see that we have reached that stage where the rupee can be termed as volatile