Federation of Indian Export Organisations (FIEO) president Ganesh Kumar Gupta said that the bank credit issue of exporters are yet to be resolved.
New Delhi: Exporters on Thursday complained of being choked of credit due to reluctance of the banks to lend them despite government efforts to ease cash crunch.
Federation of Indian Export Organisations (FIEO) president Ganesh Kumar Gupta said that the bank credit issue of exporters are yet to be resolved. “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,” said Mr Gupta.
He said that exporters are not able to discuss issues and challenges with regard to availability and cost of credit to the exports sector.
Commerce minister Suresh Prabhu is taking several steps to promote exports. But it would not fructify if banks would not lend to exporters smoothly and at affordable rates, said Mr Gupta.
Exporters had complained that the banks are reluctant to lend them after Nirav Modi defrauded PNB of Rs 11,500 crore.
Exporters had said that if one person had committed fraud that doesn’t mean that everyone should be looked at with suspicion.
“On one hand, the government is pushing digital India initiative and paperless transactions, these banks demand bundles of documents, collateral and other papers for considering our applications for smaller limit (`1 to 5 crore) of loan,” he said.
Mr Gupta complained that it takes months and months to get these limits approved and in the mean time exporters loose their orders. “The issue needs urgent attention of the government,” he said.
Mr Gupta said that temporary truce between China and US is good for world economy and trade as it has reduced the uncertainties which will help in further growth of global trade. “The existing tariff on a large number of products provide opportunity to other countries in their exports to US and China,” he said.
Last month jewellery exporters too had complained that tighter lending will hinder any recovery in overseas sales this year, stoking fears that buyers will shift to rivals China and Thailand.
After the Nirav Modi fraud came into light, RBI banned short-term financing in foreign currency to limit the damage to the financial system hitting them.