Promotion Council for EOUs & SEZ Units
of Commerce and Industry, Govt. of India)
Bhikaiji Cama Bhawan, Bhikaiji Cama Place, New Delhi-110066
Tel : 011-26167042/ 26165805/26166185 Fax : 011-26165538
Email : email@example.com
Nomination of Export Promotion Council for EOUs and SEZ Units(EPCES)
in the All India Export Advisory Committee of RBI.
Bank of India holds biannually All India Export Advisory Committee
Meeting for discussing various issues relating to Export Credit,
Exchange Control etc. EPCES had requested that it should be nominated
as a member in this Committee. I am happy to inform you that RBI
vide its letter No.IECDNo.750/04.02.02/2003-04 dated 19.8.03 has
informed the EPCES that EPCES has been nominated as a member of
the All India Export Advisory Committee of RBI.
had also taken up with RBI various issues relating to banking sector,
as had been received from our members. EPCES had specifically requested
that Pre-shipment Credit in Foreign Currency (PCFC) should be made
available to EOUs/SEZ Units on priority, Whole Turnover Packing
Credit Guarantee Commission should not be passed on by banks to
the exporters, Stamp Duty should not be imposed on export DA bills,
Transaction Cost for banks should be reduced and accordingly instead
of levying "ad valorem" commission, banks should move
towards reasonable fixed charge, reducing cost of finance and accepting
forward cargo receipt as negotiating document etc.
RBI has examined all the suggestions made by EPCES and has responded
positively to some of the suggestions. I am enclosing a copy of
letter and a copy of comments received from RBI for your information.
I would like to inform you that RBI is holding next meeting of the
All India Export Advisory Committee in Guwahati on September 12,
2003. EPCES has been invited for participation in this meeting.
I request you to send to us your issues/suggestions relating to
banking sector by Wednesday, September 3, 2003 positively so that
we can take up these issues with RBI.
BANK OF INDIA
Export Promotion Council for EOUs and SEZ Units,
705, Bhikaji Cama Bhavan,
Bhikaji Cama Place,
Issues/suggestions related to Export Credit
refer to your letter No.EPC/SEZ/AM/Functl.08/ dated June 4, 2003
on the captioned subject. Our comments on your suggestions on matters
related to export credit are furnished in the Annexure.
regards your suggestion to include you as a member of the All India
Export Advisory committee, we are pleased to inform you that we
have included the name of your organization in the Committee.
Suggestions from EOUs/SEZ Units
credit in foreign currency should be made available to EOUs/SEZ
Units. Banks should give priority to exporters particularly
to EOUs/SEZ Units in lending foreign currency loan and only
after meeting their requirement Foreign Currency Loan (FCL)
be provided to domestic units. Sufficient dollar funds must
be made available to the banks for this purpose
is no shortage of foreign currency availability in the market
for all genuine transactions and investment by Corporates, banks
and others. Banks are permitted to arrange lines of credit from
overseas banks to augment foreign currency funds for on lending
to exporters. As RBI is moving away from micro regulation, extending
export credit to concerned entities either in Rupees or in foreign
currency is left to banks depending on their business considerations.
Making foreign currency funds available to banks from our Forex
reserve does not fall in line with the best international practices.
should not charge the premium on WTPCG to the exporters. RBI
should decide and differentiate between good accounts and defaulting
accounts and give its directions to banks so that the scheme
of cross subsidization being run by banks and ECGC can be immediately
present banks pass on the premium on WTPCG to the exporters.
Now ECGC is coming out with new schemes of guarantee whereby
selected accounts of banks/branches can be covered by guarantee
instead of the Whole Turn Over Packing Credit (WTPCG). In that
scheme banks can exclude accounts on which they do not require
guarantee. However, this will be left to the discretion of the
banks based on their commercial judgement and risk perception
of export bills.
re-examined by FEDAI.
duty on export DA bills.
duty is an item to be taken up with Government as it is levied
under the Stamp Act of Government. This is being examined by
should discontinue the practice of deducting the interest upfront
on bills discounted and instead charge interest only on the
actual credit availed by the exporters.
for the unexpired term of the bill is payable upfront at the
time when the bill is discounted/negotiated. This is in line
with the international practice.
transaction cost instead of levying 'ad valorem' commission
in ports and exports, banks should move towards a reasonable
fixed charge per transaction, based on the actual administrative
cost incurred by them.
present service charges are decided by banks and RBI do not
interfere in this matter. However, RBI has advised banks not
to view this item as a source of income for increasing profit.
should advise banks not to insist on tangible security in the
case of EOUs/SEZ units.
does not interfere with the commercial judgement and risk perception
of banks. However, banks have been advised that no worthwhile
export proposal should suffer for want of credit vide para 1.3.2(ii)(f)
of our Master Circular on Simplification of Procedures.
has started an Offshore Banking Unit.
Rate on rupee packing credit should be reduced.
announced in the Monetary and Credit Policy, interest rate on
rupee export credit is being deregulated in a phased manner.
term financial requirements of 100% EOUs in the form of term
loan/equipment refinance etc. should be made available in foreign
currency at reasonable interest rate on priority.
may take up with banks.
renewal of PC limits, banks charge exorbitant processing fees.
Such processing fees are to be restricted to reasonable charges.
is left to the banks and exporters should take it up with banks
as RBI do not prescribe such rates.
limits to be sanctioned in busy season.
per para 1.2.2 read with 1.3.2(ii)( c ) of our Master Circular
on Customer Service, we have advised banks to sanction adhoc
limit and peak/non-peak credit facilities to exporters.
instructions are in place vide paragraph B5 of Section B of
our Master Circular EC.CO.PCD.No.29/15.02.70/2002-03 dated January