labels: economy - general, banks & institutions
No ceiling on export credit to smaller sector, says finance minister news
09 March 2007

Mumbai: There is no ceiling on export credit given by public sector banks to small-scale companies. Banks usually sanction export credit as also working capital loans after assessing the performance of each customer, finance minister P Chidambaram informed the Lok Sabha.

He also denied that banks are prescribing export credit limits to small-scale pharma exporters, thereby putting these units into difficulties.

He said credits of up to Rs25,000 are generally approved within a fortnight while those above Rs25,000 are cleared within two months' time.

In fact, Chidambaram pointed out, export credit to the pharma sector as a whole has grown 30 per cent from Rs12,682 crore in 2004-05 to Rs16,200 crore in 2005-06.

Also, he pointed out that with a comfortable foreign exchange reserve position, the government is not insisting on quick repatriation of export proceeds.

Chidambaram, who introduced the Banking Regulation (amendment) Bill, 2007, blamed the slack growth in SSI pharma exports to strict regulations in foreign countries, which he said the small units are unlikely to meet.

The government, under the national common minimum programme for small-scale industries and agro and rural industries, had announced a policy package for stepping up credit to micro, small and medium enterprises.

 search domain-b
No ceiling on export credit to smaller sector, says finance minister