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IDBI Bank plans to offer rupee export credit from all its branches in a bid to increase its export credit portfolio. Currently, the public sector bank offers export credit from 50-odd branches that are authorised to deal in foreign exchange.
These branches also support the export credit (both in foreign currency and rupees) requirements of exporters-customers of the 1,050 branches.
According to B.K. Batra, Deputy Managing Director, being a relatively new bank, IDBI Bank lags behind peers in fund-based export credit.
“Fortunately, we have a large number of corporate relationships. What we have found is that our engagement with them vis-à-vis export credit needs to be improved.
“Right now, 20-25 per cent of our exporter-clients avail of export credit (working capital) from us. So, we need to scale it up so that at least 50 per cent of the clients take partial export credit from us,” said Batra.
Towards this end, the bank will increase coverage of clients by providing them larger number of touch points (branches).
Customer interfaceLast year, IDBI Bank’s export credit (working capital) disbursements were about Rs 6,400 crore. This year, the bank is expecting export credit disbursements of about Rs 10,000 crore.
“If the touch point is directly facing the customer then it makes a lot of difference. The customer or his executives feel more comfortable if they can interact with a bank official and resolve issues relating to discounting of bills, get a Letter of Credit issued and get trade credit done across the table,” said Batra.
Pointing out that IDBI Bank is making efforts to become more competitive, the official said it is now making rupee export finance available at the base rate (10.25 per cent) and export credit in foreign currency at the London Inter-Bank Offered Rate (Libor) plus 100 basis points.
“We want to give more thrust to working capital for exporters. Presence, pricing and products are the three areas that we are focussing on so that our export credit portfolio grows.
“As it is, our emphasis is on increasing working capital vis-à-vis term loan to de-risk the loan portfolio so that we have lesser long-term loans,” said Batra.
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