Gold credit card no great relief for exporters

NEW DELHI: While the EXIM policy has announced gold credit card for the exporters (similar to credit cards for the retail customer), this is no way expected to meet the actual needs of the exporters. In fact, commerce minister Arun Jaitley told ET in an exclusive interview (see interview with the commerce minister) that if he had presented a regular exim policy, he would have liberalised credit terms for exporters. As of now, paucity of time came in the way of thorough measures to expand trade credit on easy terms.
“A gold credit card scheme for credit worthy exporters with good track record is also being finalised by the RBI to enable them to obtain export credit without difficulty. This would ensure easy availability of export credit to Indian exporters at best terms and enhance the competitiveness of Indian goods and services,� said the official release.
Exporters have been asking for better rate of interest from the commercial banks similar to what the good domestic borrowers of the commercial banks are getting. In addition, they have been asking for foreign exchange denominated packing credit. But the Exim policy has not come out with any such benefit. The reason given by the exporters are: “since we earn foreign exchange, we should be given credit in foreign exchange.�
With excess liquidity, banks have been running after any good borrower in any category including the good exporter. “There is stiff competition amongst banks to give credit to the good exporter. The revenues have come down in the case of fee based activities of the bank due to increased competition,� explained a banker.
Exporters currently borrow at a rate between 7.5% to 8%. But looking at the rates enjoyed by the AAA borrowers (who borrow at MIBOR linked rates), exporters have been looking for a rate of 6%.