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RBI sets up technical committee to address exporters’ credit issues

15 Feb 2013 Evaluate

In order to look at difficulties faced by exporters to get bank credit, the Reserve Bank of India (RBI) has set up a technical committee to suggest steps to rationalize transaction cost and remove procedural bottlenecks. The committee will be chaired by RBI Executive Director G Padmanabhan. The apex bank has asked the committee to submit its recommendations by April 30. Pursuant to this the RBI has also invited comments and suggestions from the stakeholders until February 28, 2013. The RBI will review the existing policies/procedure relating to bank finance for exports and suggest measures to improve timely, adequate and hassle free flow of credit towards working capital, capital expenditure and other requirements of the sector and, in particular SME units.

The committee will evaluate and suggest ways to improve financial support to export sector from alternative sources such as factoring, interest subvention, and export advance from external sources. Further, efficiency of export supporting bodies such as EXIM Bank, ECGC, will be assessed by the committee, apart from rationalize transaction cost i.e. bank charges, payment of other fees to improve transparency, will also be reviewed.

Besides this, the panel will also suggest measures to simplify and rationalize existing procedures of documentation, examine special needs of exporting units located in special economic zones, requirement of merchanting trade and review process of realization or repatriation of export proceeds.

EXIM Bank, ECGC (Export Credit Guarantee Corporation), select banks, Federation of Indian Export Organization (FIEO), Indian Banks' Association (IBA) and Foreign Exchange Dealers Association of India (FEDAI) will represent the committee.

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