RBI Sets Up Panel To Tackle Export Credit Delivery Issues

Mumbai, July 29: | Updated: Jul 30 2002, 05:30am hrs
The Reserve Bank of India (RBI) has constituted a committee to impress on commercial banks about the need to improve credit delivery for exporters on the lines suggested by the National Council for Applied Economic Research (NCAER) after its nation-wide survey, a couple of months ago.

“In order to sensitise commercial banks about the need to bring about improvements in the credit delivery system on the lines suggested by NCAER, a small committee consisting of officers from RBI and commercial banks has been constituted,” RBI sources told The Financial Express.

The members of the committee are RBI chief general managers of industrial and export credit department, and exchange control department, K Vijayaragavan and SC Kakar respectively; State Bank of India’s (SBI) general manager PB Lahiri; Bank of Baroda general manager, N Balasubramanian;and Bank of India general manager, SA Bhat. The first meeting of the committee was held on June 24, 2002 in Mumbai with representatives of a few banks. Issues relating to simplification of procedures for hassle-free delivery of export credit were discussed in the meeting.

The committee later also met the executive director of Export Credit Guarantee Corporation of India to discuss issues pertaining to them.

It will also visit other centres to discuss/sort out the problems faced by exporters/bankers to ensure adequate and timely credit to the sector, sources added. “Instructions will be issued to the banks as and when considered necessary on the basis of interaction of the committee with the bankers at different centres,” the sources said. The NCAER’s nation-wide study suggested that the RBI needs to pay greater attention to problems faced by the exporters by giving greater emphasis to specific regions, size-groups, product-categories, and bank-group association of exporters through resolving the typical problems that these classes of exporters face.

The study has pointed to the segments where the satisfaction with the credit system is relatively lower. The survey had been sponsored by the RBI, in line with its announcement in the Mid-term Review of Monetary and Credit policy for 2001-02. The survey, conducted among agencies of export finance and exporters, found that nearly 84 per cent of the bank branches studied had been skirting the RBI guidelines relating to “no insistence” on collateral security. “Relatively more frequent occurrence of this situation across regions is in bank branches in north, while across bank groups nationalised and private bank branches have been observed behaving like this,” the survey said.

Bank branches in the east and foreign banks across the country were found relatively conservative in catering to the needs of small exporters — with an export turnover of less than Rs 50 lakh. Nearly half the bank branches have reported no fixed target of achieving export credit disbursal during the year 2000-01, the survey said.

Nationalised banks are the leaders in providing export finance, followed by SBI and associates, private banks and foreign banks.