Piyush Goyal suggests way to improve export credit

NEW DELHI: Commerce and industry minister Piyush Goyal has proposed to make credit in foreign currency available to exporters and asked private sector banks to lend to small exporters, as part of efforts to improve flow of credit to the exports sector.

“In the last few years, the share of export credit has come down and this is a cause of concern especially for the MSME sector that suffers due to demand of collateral from lending institutions,” the commerce and industry ministry quoted Goyal as saying in a press release issued on Friday.

Goyal held a day-long meeting on issues related to export credit, with officials of the finance ministry, heads of financial institutions and representatives of exporter organisations, including Federation of Indian Export Organisations, and Gem and Jewellery Export Promotion Council (GJEPC).


The government aims to take exports of goods and services to $1 trillion each in the next five years.

The total disbursement of export credit was ?7.38 lakh crore in December 2018, a decline of 20% yearon-year. Share of PSU banks in total disbursement of export credit declined to 45% in FY18 from 65% in FY16.

“The Reserve Bank of India (RBI) has been asked to look into $25 billion line of credit from its foreign currency reserves for swap to well performing banks, and to also look into priority sector lending norms for export credit,” the ministry said in a statement.

The minister emphasised that it is the joint responsibility of banks and government to ensure that export credit is available to businesses at competitive rates.

Issues related to bank coverage charges, exports to Iran, processing fee, collateral requirements and loan disbursals were taken up at the meeting.

A person who attended the meeting, said, “RBI has healthy foreign exchange reserves which it can offload to lend to small exporters. Also, the minister proposed that all subsidies be used for financing and banking channels. He told private sector banks to do risk lending also besides profit-lending, to cover marginal players.”