Financial Daily from THE HINDU group of publications
Thursday, Feb 09, 2006
Financial Daily from THE HINDU group of publications Thursday, Feb 09, 2006 |
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Money & Banking
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Credit Market Industry & Economy - Exports & Imports Forex loans — Exporters first: RBI Our Bureau
Mumbai , Feb. 8 THE Reserve Bank of India has directed banks to give priority to exporters in granting foreign currency loans over non-export borrowers. This is one of the recommendations of the RBI's Working Group set up to review export credit, which was released on Tuesday. Banks should also ensure speedy disposal of applications of export credit by small and medium exporters to give the sector a push. Banks should raise all queries in one shot to avoid delays in sanctioning credit and evolve guidelines so that collateral security is not insisted upon as far as possible, the group said. The RBI also has asked the Indian Banks Association to come up with a simplified loan application form in consultation with the Federation of Indian Export Organisations and other export promotion agencies. This application form should serve as a model for all banks, the RBI said. Banks can also enlist the help of export organisations in arranging training sessions to small and medium exporters on filling up application forms and in providing all information to banks. Banks should not only ensure speedy disposal and sanctioning, but the internal audit of banks should report violations. The Working Group said the interest rates prescribed by the RBI are ceiling rates. Since the banks are at liberty to charge lesser rates of interest, taking into account the cost of funds, margin requirements and risk perception, banks may consider extending export credit at rates lower than the ceiling rates prescribed by the RBI.
More Stories on : Credit Market | Exports & Imports | Forex | RBI & Other Central Banks
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