RBI forms committee to examine issues in export credit

MUMBAI: The Reserve Bank of India on Wednesday set up a technical committee to examine issues relating to difficulties being faced by exporters with regard to availability of credit, transaction costs, insurance and factoring and other procedural hassles in their dealings with banks and financial institutions.

The committee will review the existing policies relating to bank finance for exports and suggest measures to improve timely, adequate and hassle-free flow of credit towards working capital, capital expenditure and other requirements of the sector.

It will also suggest ways for improving financial support to the export sector from alternative sources like factoring, interest subvention and export advance from the external sources.

The RBI group headed executive director, G. Padmanabhan will also propose measures to rationalise/reduce the transaction cost including bank charges and payment of other statutory fees, so as to improve transparency and certainty in the dealings of exporter clients with banks/other institutions.

It will submit its recommendations by end of April 2013. This group will examine the existing capabilities and the emerging requirement of the system and the staff of the banks, financial and other connected institutions dealing with the export sector.

It will also suggest measures to simplify and rationalise the existing procedure including the documentation, requirements for availing of various facilities and compliance with the requirements under FEMA.