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RBI eases overseas lending norms for exporters
Our Bureau
Mumbai
,
June 7
EXPORTERS have been permitted to grant higher trade related loans from their exchange earner's foreign currency (EEFC) account to their overseas importer customer without an overseas bank's guarantee.
The Reserve Bank of India has raised the limit to $1,00,000 from $25,000, beyond which the overseas borrower has to get a guarantee of a bank of international repute situated outside India in favour of the exporter, said a press release from the central bank.
Last year, the central bank had raised the advance payment that an importer could make ahead of his shipment arriving from $25,000 to $1,00,000. The current move is a minor alignment to put the exporter's limit on par with that of the importer.
However, the higher loan limit from the EEFC account might not find many takers at present. Currently, very few players make advances even up to $25,000 but the RBI's move is certainly in the right direction, said Mr Siddharth Rajgopal, Executive Director, the Cotton Textile Exporters' Promotion Council. EEFC advances are made to the importer client as a goodwill gesture for a tenor of 120-180 days at an interest rate of 100-150 basis points, said an exporter.
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