Hedging best thing to protect exporters’ interests: Indian Bank Chairman
Tirupur/Coimbatore: Indian Bank Chairman and Managing Director M.S. Sundara Rajan on Friday asked the exporting community to adopt best risk management practices to overcome the problems posed by currency fluctuations.
Speaking at the ‘Import Export Customers’ Meet’ at Tirupur Exporters’ Association (TEA) hall here, he said that “In business, you cannot predict what is going to happen tomorrow. You should have the best risks management practices. One is hedging. You cannot forecast because the dynamics are all changing.”
He suggested that hedging was the best thing to protect exporters’ interests. More and more companies were doing this. He asked the exporters to get forward coverage by going in for hedging. So many customers are doing this as this was the only way of survival, Mr. Rajan said.
The sudden strengthening of Indian rupee following huge inflow of dollar had put the exporters in a critical juncture. He exuded hope that despite all the odds, the knitwear industry of Tirupur would grow further. Explaining the benefits of collaboration and alliance among banks, Mr. Rajan asked the exporters too to have such alliance among them while competing with each other in business.
Responding to the plea by the TEA president, A. Sakthivel, Mr. Sundara Rajan asked his bank staff to stand with exporters during their time of difficulty. He said the bank authorities should join hands with exporters in getting the payments from the importers, if any problem arises. He further said that the bank did not hike the interest rates and their rates remain the lowest in the banking industry.
Stating that 1,150 branches out of 1,471 were computerised, Mr. Rajan said that all branches would be computerised before the end of March. Indian Bank was planning to open 50 more branches. He said despite the rapid development of banking sector, only 40 per cent of the population had access to banking. The bank would take steps to bring the underprivileged into financial inclusion.
Mr. Sakthivel said that the bankers put blame on exporters when there was problem with buyers. Insisting on change in attitude, he said that the bankers should take up the issue with their counterparts in overseas and help the exporters.
Stating that the country would see a stronger rupee in the wake of enormous inflow of dollar, V.R. Rajan Babu, Deputy General Manger (International Division) of the bank, cautioned the exporters to be careful right from costing.
Inaugurating the bank’s financial inclusion project at Chinniyampalayam in Coimbatore, Mr. Rajan said all the branches of Indian Bank would be connected under core banking solutions system by the end of this financial year. He said so far 1,150 of the 1,471 branches had been connected under the core banking.
The bank had about 3.9 lakh “no frills accounts” under the financial inclusion programme. Further, the bank had advanced nearly Rs. 600 crore to over a lakh self-help groups. It had granted nearly Rs. 700 crore as educational loans to over 57,000 students.
The Deputy General Manager and Circle Head of the bank, P.N. Patel, said that new accounts were opened for all the eligible families that did not have a bank account in Chinniyampalayam under the programme.
So far, Pasur, Vagarayampalayam, Samathur and Deepalapatty villages had been declared as villages provided with 100 per cent banking services. The bank was implementing financial inclusion programme in more than 100 villages in Coimbatore, Erode and the Nilgiris districts under this circle.
Under the project, no frills account was opened for those who did not have a bank account in the villages and in the second phase, the needy would be granted overdrafts from Rs. 500 to Rs. 5000. For those interested in starting business, General Credit Card with limits up to Rs. 25,000 would be sanctioned. The Chinniyampalayam branch manager, K. Rajagopal, welcomed the gathering.