Ludhiana/National News- Fluctuation of rupee had impacted borrowings in foreign currency adversely: FIEO

Ludhiana, September 26, 2013: S. C. Ralhan, Regional Chairman (NR), Federation of Federation of Indian Export Organisations (FIEO) while thanking the Reserve bank of India for issuing a notification on re-evaluation of export credit limits in foreign currency stated that the fluctuation of rupee had impacted borrowings in foreign currency adversely and as a result of the same revaluation at a higher value in terms of Indian Rupees resulted in the exporter being asked to reduce their exposure by part payment or where the export credit limit is not fully disbursed/ commensurate reduction in the available limit depriving exporter of funds.
FIEO stated that RBI's Technical Committee on services/facilities for exporters is of the view that Indian Banks will insulate exporters from rupee fluctuations and save banks the trouble of monitoring/re- allocating limits towards export credit in foreign currency on a periodic basis or monthly basis.
FIEO stated that with the new notification in place computation of the overall export credit limits of the borrowers on an on-going basis which could be monthly has been suggested to banks so that they re-allocate limit towards export credit in foreign currency, thereby increasing or decreasing the Indian Rupee equivalent of foreign currency component of export credit.
FlEO expressed the apprehension that one of the fall -outs of such periodic assessment could .also be service charge levy by banks adding to existing roster of levies such causing additional cost burden.