Tirupur: The Tirupur Exporters Association has termed the Reserve Bank of India’s decision to extend the period of entitlement of the first slab of pre-shipment rupee export credit and enhancement of Export Credit Refinancing (ECR) limits as a ‘boon to exporters’.
A Sakthivel, president of TEA, told The Hindu that the extension of the period for repayment of pre-shipment export credit, now available at a concessional interest rate ceiling of the benchmark prime lending rate minus 2.5 per cent, from 180 days to 270 days would act as catalyst to enhance the foreign exchange earnings of the country. He urged the RBI to take similar step to increase the repayment period for post-shipment credit too from the existing 90 days to 270 days.
According to him, decision to enhance the ECR from 15 per cent to 50 per cent of the outstanding export credit eligible for refinance is welcome.
He pointed out that the RBI’s move to immediately allocate amounts, in advance, from scheduled commercial banks for contribution to the Small Industries Development Bank of India (SIDBI) to the extent of Rs. 2,000 crore would ensure growth momentum in employment-intensive sectors of micro and small enterprises.