The President of Federation of Indian Export Organisation (FIEO) S.C. Ralhan has suggested the need for a study to ascertain the cost of credit for exports.
The share of exports as a percentage of net bank credit had fallen to 3.8 per cent a year ago. Even if this is increased marginally, it would still be far below the target of 12 per cent fixed by the RBI. Such a study therefore would help banks ascertain their lendable credit to the export sector as per RBI guidelines, the FIEO President said.
Hailing the banking regulator’s decision to include medium enterprises and exports under priority sector lending, he said, “It is a welcome move but by restricting the facility to a sanctioned limit of ₹25 crore per borrower to units having a turnover of up to ₹100 crore, it would be limited to a third of the exporting units. The modification is a step forward but not enough.”
He further said that the recent move to increase the threshold limit of small and medium industries ensured flow of credit to all manufacturers with investment in plant and machinery up to ₹10 crore as against ₹1 crore earlier.
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