RBI eases rules on access of forex loans by exporters
Exporters facing tough situation due to slump in overseas demand have a reason to cheer. The Reserve Bank of India has relaxed norms pertaining to export credit in the global market, enabling exporters to avail funds from overseas market.
Banks are allowed to raise export credit in foreign currency at 350 basis points (bps), from 100 bps offered by the London Interbank earlier, with immediate effect. However, the banks are not allowed to levy any charges like service tax on the credit availed from global market. The revised rules will be applicable to where Euro- Libor is used as a benchmark.
The Union Government is also weighing other options to help the slowdown hit export industry, directing banks to lend exporters without any reluctance. Exporters have been complaining that banks are not lending despite having sufficient liquidity, fearing grimmer situation ahead due to global meltdown.
Fund's cost had also been increased in the international market, in recent times, in the wake of global financial crisis aroused after failure of leading financial institutions of the world.