Credit Norms For Exporters Eased

The Reserve Bank of India (RBI) has simplified the credit procedure for exporters following suggestions by export organisations.

As per the new norms, banks may adopt a tractable approach in negotiating the bills drawn against letter of credits (LCs) where the credit limit is utilised fully. In such cases, the bank should consider delegating more sanctioning and discretionary powers to the branch managers in order to meet the credit requirements of the exporters.

As an extension of this facility, branches may also be authorised to disburse a certain percentage of ad-hoc limits, pending sanction from higher authorities or boards, to enable the exporter to meet urgent export order payments in time.

 

Banks are reportedly hesitant to waive any submission of LC, even for exporters with good financial track records, as far as settlement claims are concerned. These waivers will adversely affect the Export Credit Guarantee Corporation (ECGC). The ECGC said in case such a waiver was to be granted, it should be part of the initial agreement which must to be conveyed to the ECGC.

As for export-related cover for various goods, some more categories have been exempted from the interest rate surcharge and have been included in the Exim policy announced on March 31, 2000. Some of the categories that have now been exempted are bonafide imports under duty-free replenishment certificate (DFRC) scheme, gem replenishment license and diamond import license.

All bonafide imports of capital goods by units under electronic hardware technology parks (EHTPs), software technology park (STPs) and special economic zones (SEZs) are included.

These categories are in addition to those which are already exempted such as packing credit, import of capital goods by bonafide borrowers, imports by export-oriented units, imports of raw materials under certain categories, imports under the duty entitlement pass book (DEPB), bulk imports of oil, petroleum and other essential commodities through government agencies and the import of crude oil by private sector refineries for their own use.