RBI cuts export credit rate for AEZ units to 8%

Hyderabad, January 30: | Updated: Jan 31 2002, 05:30am hrs
In a move to increase exports of agricultural produce in the country as specified in the Exim Policy March 2001, the Reserve Bank of India (RBI) has announced the reduction of export credit rate from 11 per cent to 8 per cent for those processing units and exporters engaged in the agri-export zones (AEZs).

The RBI has recently issued a circular to all the commercial banks effecting the reduction in the rate. The circular said the the producer must enter into a contract with a farmer or a group of farmers having cultivable land close to the zone. Further, the exporter has to purchase the produce as a raw material to provide the value-addition and export. The bank must ensure that the exporters have made the required arrangements with the farmers and overseas buyers for the purchase of crop and products to be exported, before financing the unit in the AEZ.