EPCES CIRCULAR NO.27 DATED 19.12.03

 

EPCES holds meeting with Shri Vinod Rai, Additional Secretary (Banking)

A delegation comprising Mr. R. Veeramani, Chairman EPCES, Mr. Sharad Jaipuria, Vice Chairman, EPCES, Mr. L. B. Singhal, Director General, EPCES, Mr. R. K. Sonthalia, Working Committee Member, Mr. P. C. Nambiar, Working Committee Member and Mr. Sunil Jain, Managing Director, I. C. Textiles Ltd, met Shri Shri Vinod Rai, Additional Secretary (Banking) on December 17, 2003. In the meeting, following issues were taken up with the Additional Secretary (Banking):-

i) Providing Pre-shipment Credit in Foreign Exchange on priority to EOUs and SEZ Units
ii) Making operational Textile Restructuring Fund
iii) Whole Turnover Packing Credit Guarantee Commissioner (WTPCGC) should not be passed to the EOUs/SEZ Units.
iv) High transaction cost for banking
v) Cost of finance
vi) Crystalisation of export bills
vii) Stamp duty on export DA bills
viii) Interest on bill discounting
ix) Extending the facility of Offshore Banking Units (OBUs) to EOUs
x) Doing away with the requirement of Collateral Security.
xi) Long term financial requirements for EOUs & SEZ Units
xii) Availability of Packing Credit limit on adhoc basis
xiii) Impact of appreciation of Indian rupees on exports
xiv) Export bills discounting
xv) Import bill payment

In the meeting Shri Vinod Rai, Additional Secretary (Banking) observed the following:-

1) Shri Vinod Rai, Additional Secretary (Banking) appreciated the contribution of EOUs/SEZ Sector and assured that he will explore the possibility of making Pre-shipment Credit in Foreign Exchange to EOUs/SEZ Units on priority. He will also request RBI to explore the possibility of making available finance to EOUs from OBUs.

2) Shri Vinod Rai, Additional Secretary (Banking) has taken prompt action immediately after the meeting. He has sent a communication to Shri A.K. Purwar, Chairman, State Bank of India, Shri S.S. Kohli, CMD, Punjab National Bank, Shri M. Venugopalan, CMD, Bank of India, Shri R.V. Shastri, CMD, Canara Bank, Shri P.S. Shenoy, CMD, Bank of Baroda and Shri S.C. Gupta, CMD, Indian Overseas Bank informing that the difficulty of EOUs and SEZ Units appear to be major deterrent in their capacity to compete in the foreign market especially so when the dollar premium has declined considerably. In this context, low cost finance in the form of pre-shipment credit becomes very critical for such units. He has requested that difficulty of EOUs and SEZ Units appears to be genuine and they deserve to be provided Pre-shipment Credit in Foreign Exchange on priority basis.

3) Shri Vinod Rai, Additional Secretary (Banking) while appreciating the problems of EOUs/SEZ Units has again very promptly written to RBI, immediately after the meeting, that EOU/SEZ Sector has registered a very convincing growth in exports and their contribution to the GDP has been very substantial. He has stated that easy availability of finance to EOUs/SEZ Units would help export sector in very large measures. It would also take care of their need for availing long term loans in foreign currency at reasonable rates. He has requested RBI to explore the possibility of extending EOUs the facility of availing finance from OBUs.

4) Shri Vinod Rai, Additional Secretary (Banking) also informed to EPCES that problems relating to availability of funds for the Textile Restructuring has been resolved and funds would be made available from Monday, December 22, 2003 onwards.

I may also draw your attention to our Circular dated 12-12-2003 wherein we have informed you about the participation of India Trade Promotion Organisation (ITPO) in Cairo International Fair, Cairo (Egypt) from March 16 to 26th 2004 and Electronics and Computer Software Export Promotion Council (ESC) fourth series of its annual INDIASOFT 2004 from 10 to 12th February 2004 in New Delhi Please send your response at the earliest, in case you are interested in participating.