;
Home / Knowledge / News / Textiles / Indian exporters urge RBI to reconsider ban on LoUs
Indian exporters urge RBI to reconsider ban on LoUs
29
Mar '18
Concerned over the recently-unearthed $2-billion fraud at the Punjab National Bank, the Federation of Indian Export Organisations (FIEO) has urged the Reserve Bank of India (RBI) to reconsider banning letters of undertaking (LoUs) as it is causing distress to players in sectors such as textiles and leather, apart from raising their operating costs.

FIEO, an umbrella body representing a number of export organisations, has written to the RBI requesting it to consider introducing LoUs with safeguards as alternative instruments were increasing the operating cost of exporters by up to 3 per cent, according to a report in a top Indian business daily.

With a few banks cancelling issued LoUs, the situation has turned worse as exporters do not have enough cash to pay upfront for their imports, FIEO director general Ajay Sahai was quoted as saying.

An LoU is a guarantee given by one bank to another to repay a loan on behalf of a client and which allows the client to raise short-term credit to mainly pay for an import.

FIEO also wrote that existing LoUs or LoCs (letters of comfort) should be allowed to live their normal validity as some banks have asked exporters to deposit equivalent amount in lieu of the instruments. (DS)

Fibre2Fashion News Desk – India


Must ReadView All

Myanmar requests EU not to revoke trade preference

Apparel/Garments | On 21st Jan 2019

Myanmar requests EU not to revoke trade preference

Myanmar Government officials and businesses have requested the...

Tanzania spends Sh7 bn to boost cotton production

Textiles | On 21st Jan 2019

Tanzania spends Sh7 bn to boost cotton production

Tanzania has injected Sh7 billion for distribution of insecticides...

India to soon have own standard for apparel size: minister

Apparel/Garments | On 21st Jan 2019

India to soon have own standard for apparel size: minister

India will soon roll out a size project for Indian apparel on the...

Interviews View All

Top executives, Textile industry

Top executives
Textile industry

Textile institutes need to change their curriculum

Top executives, Textile industry

Top executives
Textile industry

The new deal is better than NAFTA for the US textile industry

Evelyne Cholet, UCMTF

Evelyne Cholet
UCMTF

‘France had a reputation of being big in new ideas, but poor in marketing...

Shyam Gupta & Ravi Gupta,

Shyam Gupta & Ravi Gupta

Based out of South Delhi, Gargee Designer's provides bespoke formal and...

C Dhandayuthapani,

C Dhandayuthapani

MAG Solvics Private Limited was established in 1991 to design and develop...

Abhishek Pachauri,

Abhishek Pachauri

Reckon Industries is into manufacturing of textile process house machines, ...

Mary-Cathryn Kolb, Brrr°

Mary-Cathryn Kolb
Brrr°

Atlanta-based private start-up Brrr° was founded in 2014 to develop...

Johan Berlin, Investkonsult Sweden AB

Johan Berlin
Investkonsult Sweden AB

Investkonsult Sweden AB are consultants in the nonwoven and absorbent...

Kevin Nelson, TissueGen

Kevin Nelson
TissueGen

Kevin Nelson, Chief Scientific Officer, TissueGen discusses the growing...

Anisha Chaudhari, Threads & Shirts

Anisha Chaudhari
Threads & Shirts

Threads & Shirts is a freshly-tailored concept providing men/women a...

Tony Ward, Tony Ward

Tony Ward
Tony Ward

"You have to truly understand what your client wants, know her needs, what ...

Madhu Jain, Madhu Jain

Madhu Jain
Madhu Jain

She grew up in the walled city of Old Delhi, completed her studies, and...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


January 2019

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Advanced Search