"Concessions on income tax to exporters would continue.The government would advise the central bank to find ways of reducing transaction costs of exporters," banking secretary Devi Dayal said at a seminar organised by Federation of Indian Export Organisations.

Exporters called for 20 per cent tax incentive under section 80-HHC that was withdrawn by the government.

Dayal said the Parliamentary Standing Committee headed by finance secretary PK Mankad would ask the RBI to take measures for reducing the cost of transaction of exporters.

On rupee, he said government was monitoring the situation and the current guideline on 50 per cent conversion of export earners foreign currency (EEFC) accounts into rupees would be reviewed by Reserve Bank of India (RBI) from time to time.

RBI issued guidelines of converting 50 per cent of funds in EEFC accounts into rupees on Aug 14 in a bid to arrest currency depreciation below Rs 46 a dollar. "It is a temporary measure," Dayal assured exporters. RBI chief general manager PK Biswas said "considering the market conditions, the objectives (of EEFC conversion) have been achieved,"

He did not elaborate on the amount recovered so far but bankers estimate it around $850 million which is close to central bank's target of $1 billion FIEO president Navratan Samdria said the time limit of converting the EEFC accounts was very short and has affected exporters.

On export credit, the banking secretary admitted that some banks were jittery in lending exporters without colaterals and said "one should rather depend on the viability of the projects and not on colaterals."

Despite RBI stipulation to banks of lending 12 of their net credit to exporters, banks have not been able to provide enough credit, he said.

Diluting claims of exporters that the cost of funds was high in India, Dayal said "considering the deposit and inflation rates, it is not high."

He asked exporters to come up with alternative measures in order to reduce cost of operations mainly on account of power.

Samdria pointing to the penalty clauses in the recently enacted Foreign Exchange Management Act, said exporters may find it difficult to comply with the penalties.

Biswas said the central bank would despatch directives about Foreign Exchange Management Act regulations to banks next week in order to remove confusions.