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Exporters have reiterated their demand for a separate chapter in the Monetary Policy for the export sector.
Responding to the announcements made by the RBI Governor, Dr D. Subba Rao, in the mid-quarter Monetary Policy review, Mr A. Sakthivel, President, Tirupur Exporters' Association, said that the scheduled commercial banks had raised their base rate by 25 to 100 basis points after the May 3, 2011, policy statement.
“Today's announcement could force the banks to up their rates further, possibly driving the knitwear exporters out of business. We are already in a tight spot due to the closure of the dyeing units, the competing countries posing stiff competition apart from appreciation of the Rupee against foreign currencies.
“Protection from spiralling credit rates is what we seek at this juncture. A separate chapter for the export sector in the monetary policy has been our demand.
“We have also requested that the export sector be delinked from the base rate system followed by banks. Till a separate chapter for export is announced, banks should extend credit at 7 per cent (fixed) as the prevailing rates in our competing countries are much lower than ours and at China, it is being quoted at 5.13 per cent,” he said.
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