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Uncooperative attitude of bankers hurting exports: FIEO.

Date: 07-12-2018
Subject: Uncooperative attitude of bankers hurting exports: FIEO
Exporters body FIEO said the uncooperative attitude of state-owned bankers is hurting exports and it would not be possible to increase shipments without adequate credit support.

Federation of Indian Export Organisations (FIEO) President Ganesh Gupta demanded quick resolution of bank credit issues to push the country's exports.

"PSU banks officials including MDs, EDs, GMs, AGMs are not accessible to exporters, particularly from the MSME sector. This has tightened the hands of these exporters to take orders as they are not able to discuss issues and challenges with regard to availability and cost of credit to the exports sector," he told reporters.

He added that the efforts of Commerce Minister Suresh Prabhu, who is taking several steps to promote exports, would not fructify if banks fail to lend adequate funds to exporters at affordable rates.

While the government is pushing the Digital India initiative and paperless transactions, the banks are demanding bundles of documents, collateral and other papers for considering applications even for small loans, he said.

"It takes months and months to get these limits approved and in the meantime we lose our orders. The issue needs urgent attention of the government," Gupta added.

He said similar problems are being faced with regard to insurance body ECGC, which shows reluctance to extend insurance cover to exporters.

"They reject claims on very flimsy grounds. I would urge the Commerce Minister to look at the matter on an urgent basis. If banks and ECGC continue to behave like this, we would not be able to register double digit growth rate in exports," he said.

He also made a case for enhancement of duty drawback rates, inclusion of more products like fabrics under export promotion scheme MEIS and extension of the interest equalisation scheme to merchant exporters.

Only these measures can help in achieving $350 billion exports and recording substantial growth, he added.

Referring to the issues concerning trade with China, the FIEO chief said India's exports to China grew by about 17 percent in the first six months of 2018-19.

He further said a sharp decline in exports of copper, ores, minerals and zinc shows that India's exports are moving towards value added products.

On trade with Iran, he said India's exports to the country grew by about 22 percent in the first six months of 2018-19.

However, the imposition of sanctions has definitely impacted India's shipments as the three-month window provided by the US government got over in August 2018, he said.

"We have been given to understand that UCO Bank is working on necessary modalities to start the rupee payment. This should apply to all exports except those in OFAC list or those under sanctioned entities," he said.

Insurance and shipping remain a challenge for exports to Iran as both European and US based insurance/shipping companies are reluctant to take such business, he said.

Since most of the courier companies have also boycotted Iran, sending exports documents is also a challenge particularly with the unavailability of SWIFT, he said, adding India Post should look into the opportunity to fill the gap.

Source: moneycontrol.com

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