The Hindu : Front Page : Exporters get relief to tide over crisis

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Sunday, Nov 16, 2008
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Front Page

Exporters get relief to tide over crisis

Special Correspondent

MUMBAI: In view of the difficulties being faced by exporters on account of the weakening of external demand, it has been decided to extend the period of entitlement of the first slab of pre-shipment rupee export credit, now available at a concessional interest rate ceiling of the benchmark prime lending rate (BPLR) minus 2.5 percentage points from 180 days to 270 days with immediate effect, the Reserve Bank said.

It has now been decided to enhance the eligible limit of the ECR facility for scheduled banks (excluding RRBs) to 50 per cent of the outstanding export credit eligible for refinance.

“This will provide additional liquidity support to banks of an amount of about Rs. 22,000 crore. The rate of interest charged on the ECR facility will continue to be the prevailing repo rate under the LAF which is currently 7.5 per cent.”

At present, the ECR limit is fixed at 15 per cent of the outstanding rupee export credit eligible for refinance as at the end of the second preceding fortnight. The aggregate limit of ECR is currently around Rs. 9,500 crore.

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