Ease credit norms for small exporters: RBI

The Reserve Bank of India on Tuesday asked banks to ensure that funding needs of small and medium exporters were met on priority basis.

It advised Indian Banks' Association to devise a simplified loan application form in consultation with the Federation of Indian Export Organisations and other export promotion agencies, which will serve as a model for all banks.

The RBI said banks should give priority to foreign currency export credit requirements of exporters over foreign currency loans to non-exporter borrowers.

It also asked banks to consider extending export credit at rates lesser than the ceiling rates prescribed by it. Banks were at liberty to charge lesser rates of interest, taking into account the cost of funds, margin requirements and risk perception.

The central bank said banks could evolve guidelines so that collateral security was not insisted upon from small exporters as far as possible. There was a need for an attitudinal change in the approach of bank officials in dealing with small and medium exporters.

Banks should put in place a control and reporting mechanism to ensure that applications for export credit, especially from these exporters, were disposed of within the prescribed time-frame.

The RBI said internal/concurrent audit in banks should comment on whether the prescribed time-frame for disposal of export credit applications was being adhered to. The regional managers of banks should look into this aspect during branch visits.

While processing applications for export credit, banks should raise all queries in one go and avoid piece-meal queries in order to avoid delays in sanctioning of credit, it said.

State Level Export Promotion Committees, which have been reconstituted as sub-committees of the state-level bankers' committees, should play a greater role in promoting coordination between banks and exporters in the states and Export Promotion Organisations should take the initiative in coordinating the meetings.

Banks have also been asked to speed up the process of issue of cards under the Gold Card Scheme to all eligible exporters, especially small exporters, and ensure that the process was completed within a period of three months, as the number of such cards issued by banks was low.

RBI sought confirmation of compliance with this directive within 15 days of the end of the three-month period, specifying the total number of gold cards issued by them and the number of gold cards issued to small and medium exporters, export-oriented units and SEZ units.