'Slowdown hits exports of synthetic textiles' - SRTEPC Chairman

20 Feb '09

4 min read

The exporters, particularly from the small and medium sectors , were not getting access to dollar –denominated credit when the ceiling was 100 basis points above LIBOR since it was not viable for the Indian banks to extend credits at that ceiling due to the high cost of funds.

The increase in the ceiling will now facilitate the flow of funds to the exporters . With the LIBOR averaging about 1.5%, the cost of dollar loans to the exporters would be about 5% which is still lower than the interest charged on rupee loans to the exporters which is between 8 to 10.5%, the Shri Gupta added.

The Chairman also observed that the banks have increased their charges for handling export bills sent on collection basis . Banks are now charging a substantial amount of 0.15% of the export bill sent for collection subject to a minimum of Rs. 500/- and a maximum of Rs.5500/- per bill as against the earlier practice of charging Rs.500/- per bill.

This has further increased the costs for the exporters. The SRTEPC Chairman, therefore urged that the banks should be instructed to collect charges at the rate of Rs.500/-per export bill sent for collection .

The Synthetic & Rayon Textiles Export Promotion Council

More The Synthetic & Rayon Textiles Export Promotion Council News... More Textiles News - India...