The Hindu Business Line : `Asia needs a regional export credit agency'

THE Chairman and Chief Executive Officer of Exim (Export-Import) Bank of India, Mr Venkat Subramanian, has underscored the need for a body to facilitate trade flows among countries in the Asian region.

Speaking to Business Line, Mr Subramanian said the Export Credit Agencies (ECAs) or Exim banks (in the Asian Region) had firmed up an alliance among member-institutions in 1996 by floating the Asian ECA Forum.

The forum has been meeting every year to deliberate on measures that foster long-term relationships within the Asian ECAs community. The forum is slated to meet in Goa in October.

Exim Bank heads and senior officials from India, China, Japan, Indonesia, Korea, Malaysia, Thailand and the Philippines, and the Australian Export Finance and Insurance Corporation would participate in the discussions, exchange and share information, the Exim Bank Chief said.

On the need for a Regional Export Credit Agency (RECA), Mr Subramanian said, "We are exploring the possibility of setting up a regional ECA with the support of regional multilateral agency like the Asian Development Bank. ADB has suggested that it would consider introducing `Regional Export Credit and Finance Scheme' to achieve the objective of a regional multilateral agency," and explained that such a step would help reduce the transaction cost and simplify operations for the exporter.

Asked why the need for an RECA for Asia when there existed a country-level ECA, Mr Subramanian said Asian economies were significantly dependent on one another for international trade. "The developing countries in the Asian economy are major recipients of Foreign Direct Investment (FDI), but the intra-Asian FDI flow is modest. . Above all, some of the less developed countries have problems in accessing international finance," he added.

He said the RECA could refinance, rediscount or reinsure institutions and complement the existing multilateral, regional and sub-regional agreements to increase the level of intra- and extra-Asian trade and investment.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
`Outsourcing banking work carries a hidden price'

Retail banking: Effective instrument of transformation

India Bulls Q4 net jumps 290 pc

Stock of chit fund companies soaring in Kerala

No barriers for visually challenged Nafisa

Banks show disinterest in State loans

Andhra Bank fixes book closure dates

`Asia needs a regional export credit agency'

IRDA revokes suspension; Avani is now PNB Principal Insurance

YES Bank IPO likely in mid-May